Preamble

The House met at Eleven of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.

Edinburgh Corporation Order Confirmation Bill,

Read the Third time, and passed.

Private Bills contributing to Relief of Unemployment (Bill certified as a Whole).

MR. SPEAKER laid upon the Table a Certificate of the Lord Privy Seal, pursuant to the Order of the House of the 11th day of December last, that it appeared to him that the Torquay and Paignton Traction Bill [Lords] is a Bill which contains provisions relating to works the execution of which would substantially contribute to the early relief of unemployment.

Private Bills contributing to Relief of Unemployment (Bill certified as a Whole).

MR. SPEAKER laid upon the Table a Certificate of the Lord Privy Seal, pursuant to the Order of the House of the 11th day of December last, that it appeared to him that the Great Western Railway (Docks) Bill (the Petition for which was not deposited by the Promoters on or before the 17th day of December) is a Bill which contains provisions relating to works the execution of which would substantially contribute to the early relief of unemployment.

MESSAGE FROM THE LORDS.

That they have agreed to

Consolidated Fund (No. 3) Bill, without Amendment.

SELECTION (STANDING COMMITTEES).

STANDING COMMITTEE B.

Mr. Frederick Hall reported from the Committee of Selection; That they had
discharged the following Member from Standing Committee B (added in respect of the Hairdressers' and Barbers' Shops (Sunday Closing) Bill): Mr. Arthur Michael Samuel; and had appointed in substitution: Sir Philip Sassoon.

Orders of the Day — UNEMPLOYMENT INSURANCE (No. 3) [MONEY].

Considered in Committee under Standing Order No. 71A.

[Mr. ROBERT YOUNG in the Chair.]

Motion made, and Question proposed,
That it is expedient to raise to fifty million pounds the limit on the amount of the advances to be made by the Treasury to the unemployment fund under section five of the Unemployment Insurance Act, 1921, as amended by subsequent enactments, which may be outstanding during the deficiency period."—(King's Recommendation signified.)—[Miss Bondfield.]

The MINISTER OF LABOUR (Miss Bondfield): To-day I must direct the attention of the Committee to the question of the financing of the Unemployment Insurance Fund, which is the biggest thing of its kind in the world and to which all parties in this House have contributed both in regard to its benefits and to its defects. It is a matter in which undoubtedly the mere passage of time and experience produce the necessity for a very serious study of the problem presented. That is inseparable from the development of the Fund. I want to-day to give the Committee a plain statement of facts, which will, I hope, lead to a helpful and interesting discussion. The purpose of the Motion before the Committee is to authorise the introduction of a Bill to allow the Treasury to advance out of the Consolidated Fund any sums required for the purpose of discharging the liabilities of the Unemployment Fund during the deficiency period up to a limit of £50,000,000. It is within the knowledge of the Committee that the present legal position is that the Unemployment Insurance Act, 1928, limited the amount of borrowing powers to £40,000,000, and that, also, this amount automatically falls to £30,000,000 on the 31st December next unless we pass legislation in the meantime.
The events leading up to the present position require to be stated as briefly and as clearly as possible. In June, 1929, when this Government took office, the Fund was in debt to the extent of £36,870,000, and the balancing point at
that date—and by balancing point I mean the point in the register at which the income balances the expenditure—was one million on the live register. At that date, the live register was standing at 1,132,281. The Exchequer contribution to the Fund was less than one-third, the transitional period had been continued for another year without provision being made for the necessary finance of that period. By the Act of 1929 which raised the Exchequer contribution to one-third of the total, the annual revenue of the Fund was increased by£3,500,000. That was the very first thing which I had to do in order to ensure that nothing should happen in the period during the adjournment, of the House that would face me with a position of bankruptcy before the House met again in November. It was an act of justice to the Fund as well as a matter of common-sense and expediency to carry over the summer months.
By the Act of 1930, which was introduced into this House in November, 1929, the cost of transitional benefit was placed upon the Exchequer alone, and that added £10,500,000 to the annual revenue of the Fund. So that I have to take the responsibility and the credit for having added to the income of the Fund an annual increase of £14,000,000. Against that, the policy of the late Government was to decrease the revenue of the Fund to the extent of £10,000,000 annually. It would not be fair to leave the matter just at that. The Opposition would be entitled to say that it is only one side of the story. Let us examine the expenditure side. The last Government reduced the expenditure of the Fund. To the extent that that was done by reducing benefits—well, I make them a present of it. I admit at once, and I am prepared to take credit for it, that we have not reduced the expenditure of the Fund, but we have increased the expenditure of the Fund in this matter by increasing certain benefits. When the last Government left office, the revenue and expenditure, as I said just now, balanced at a 1,000,000 persons on the live register, but even taking the additional expenditure provided it the new Act of 1930 and taking into account the increase of the income on the other side, the Fund can now finance a live register of 1,240,000 applicants. In that matter, I
would like to quote what I said in the House at the time in order to demonstrate that the estimate presented to the House was an under statement rather than an over statement of the effect of the transaction. I said on 25th November:
Under this arrangement, the income and the expenditure of the Fund will balance at the point of 1,200,000 persons on the live register. 1 wish that to be perfectly clear; it will balance at the point of 1,200,000 persons on the register. Everybody hopes that the numbers of the register will be a great deal less, but my business is to make it absolutely certain that I have the money with which to pay these people if they are on the Fund and that we do not again run into a deeper bog than the one from which we have just emerged."—[OFFICIAL REPORT, 25th November, 1929; cols. 1106 and 1107, Vol. 232.]
The Committee will agree that by increasing the revenue of the Fund by £14,000,000 and by raising the balancing point by 240,000 the finances of the Fund have been substantially strengthened since the present Government took office.
I want to come to the present position of the Fund. The amount borrowed at 22nd March was £37,680,000. The payment of six months interest, about £915,000, is due on the 31st March. It is, therefore, quite clear that the statutory limit, assuming that the figures do not experience an abnormal decrease, is bound to be reached before Easter. The Committee will properly want to know why there has been this abnormal increase in the register that has caused the balancing point to be so unsatisfactory from the standpoint of the indebtedness of the Fund. I have made a very careful analysis, and I want to submit two or three sets of figures, which are only approximations in some respects, but which will indicate to the Committee the trend of events. Nothing in the case of the live register before Christmas gave any inkling of the phenomenal rise which has taken place since the turn of the year. Every previous year for which figures are recorded had shown a steady fall in the first quarter. As may be seen by going right back to 1922, and, tracing the figures up, that is the natural fall of the figures. The Opposition may say, and a great many people have already said, that the phenomenal rise in the figures is due to the operations either of my administration or to the new Act, or
to both combined. I want to make it quite clear that that would be an entirely erroneous conclusion. The new Act only came into operation on the 13th March and the actual practical working of it will take some months to demonstrate the exact effect upon the live register. I have, however, certain figures which I will give to the House.
There are three sources from which new entrants can come upon the live register. There is what is known as the two months file. That is to say, those who are on that file for various reasons, some administrative reasons and some legislative reasons, which have been altered by the effect of the new Act, will come upon the live register. The other source is known as the dead file— a file still retained at the employment exchange, of books which are more than two months old. The other source is the accumulation of books at Kew. When the local Exchange wants to weed out the dead file, they send the books to Kew. Therefore, the books at Kew will be of an earlier date than those on the two months file and the dead file. I will give certain figures, but I would remind the Committee that they are tentative figures, and I do not stress them as accurate, because we have not had time to get the necessary returns, except in some cases by telephone and in other cases by incompletely averaging sample figures.
So far as we have been able to ascertrain, from the two months file, the administrative changes account for, roughly, 5,000, and from the dead file some figure up to 5,000, but certainly not in excess of 5,000. From the books at Kew, none whatever. The total, therefore, accounted for by the administrative changes from the two months file and the dead file represents 5,000 to 10,000 new names on the live register. For my purpose, I will take the outside figure of 10,000. The administrative changes are very largely bound up with the setting up of the boards of assessors last August, and the effect which they have upon the two months file and the dead file. The legislative changes, so far as we can trace them at present, appear to have put something like 2,000 upon the live register from the two months file and about 5,500 from the dead file, and from the books at Kew something between 27,500 and 32,500 applicants, making a
total of between 35,000 and 40,000. I will take the top figure of 40,000, which I am sure is the outside figure. Add to that figure 10,000, and we get a total of 50,000 at the outside that can be attributed to either administrative or legislative changes. That represents those who have been out of touch with the employment exchanges so long that the employment book has been treated in the way that I have described.

Sir ARTHUR STEEL-MAITLAND: In order to save misconception, may I take is that that is the number up-to-date?

Miss BONDFIELD: Yes.

Sir A. STEEL-MAITLAND: It may increase later on?

Miss BONDFIELD: Yes. Mat is the figure up-to-date, but it is a purely tentative figure. Closer analysis may readjust the totals. The Committee will remember that, in the actuarial White Paper and in my speeches last November, I pointed out that I contemplated that there would be at least 80,000 brought upon the new register as the result of the changes. Up to the present time we appear to have matured about half that number. Further weeks may, and possibly will, show an increase in the figures. How are these being dealt with? It is important that some of the exaggerated ideas should be at once dispelled. I notice that some newspapers are always looking for sensations. These sensations do the country a great deal of harm when they are based on the misuse of figures and when they represent the position as being very much more serious than it really is. The situation in regard to the figures may be analysed, but the Committee will understand that, as the new Act has not been in operation more than a few days, I have not been able to get a complete return. I hope that in the next fortnight I shall be able to give the House, in the form of a White Paper or in some other convenient form, a more careful analysis of the changes. It is most important and necessary to watch the figures as we go along.
In the Press there was a tremendous outcry for a little while about the enormous numbers, thousands, who were rushing to the exchanges, and of the queues that were waiting outside to get
on to the register. I have been provided with an illustration from the only district in the country, so far as I have been able to gather, where the sensationalism occurred. It occurred in a district in the Midlands. This is the extent of it, in connection with a group of Employment Exchanges. At Bilston, there were 879 applicants, not all on one day, as a direct result of misrepresentations of the Act in a weekly newspaper. A statement was made in that paper which seemed to indicate that all that people had to do was to register in order to get their money. I do not know why this district appears to have been particularly affected by that statement, but it so happened that it was so affected. Of the 879 applicants at Bilston, 150 have already been dealt with by the court of referees. It must be understood that none of these applicants are on benefit. Of the 150 who have been dealt with by the Court, 146 have been disallowed as not being genuine claims. At Wiilenhall, there have been 500 applicants, the court have already dealt with 100, and 100 have been disallowed. At Tipton. there have been 374 applicants, and 28 have been dealt with and 26 disallowed. At Dudley, there have been 500 applicants, but they have not yet had a court sitting to hear the cases, and therefore I cannot give the result. At Brierley Hill there have been 700 applicants and the court of referees have already dealt with 175 and have disallowed 145. At Walsall, there have been 300 applicants, already dealt with 20, disallowed 20. The number of cases heard in the courts totals 473, and 437 have been disallowed as being claims which have no justification in fact.
These figures are interesting as showing that to a certain extent there is an artificial inflation of the figures which are before us at the present time. I do not wish to put that very high, but I do not think that we can in any way assume that it represents the difference between what would he normal and what is undoubtedly abnormal in the figures. In other words, as far as one can roughly analyse the situation, taking industry by industry and noting the causes of industrial depression in those different industries, we find that it divides itself very much Eke this: the increase in the figures on the live register since the Government took office
to the present time can be divided, broadly, into an increase of 50,000 due to administrative and legislative changes, and of 200,000 which would be the normal increase due to seasonal causes, leaving about 250,000 which must be regarded as abnormal for this time of the year and it is that increase, of course, which it seems to me we have to regard with the greatest possible concern. The Opposition may also say that the increase is due to uncertainty in the safeguarded industries. I want to clear that out of the way.

The CHAIRMAN: I must make it clear that we cannot have a debate on the policy of Safeguarding.

Miss BONDFIELD: I apologise. I was only going to give the figures, but hon. Members can get them for themselves.

Mr. HOLFORD KNIGHT: Will it not be in order, Mr. Chairman, to point out certain fluctuations in particular industries, although some of them may happen to be safeguarded industries?

The CHAIRMAN: It would not be in order for hon. Members to deal with the question of Safeguarding, and the statements which have been made in regard to Safeguarding. The question of the policy of Safeguarding does not arise.

Mr. KNIGHT: But would it not be in order to deal with the fluctuations in particular industries?

The CHAIRMAN: I will deal with that point when it arises.

Sir A. STEEL-MAITLAND: Surely, the number of people employed in any trade is directly relevant to the subject which we are discussing to-day, and, therefore, apart from discussing the principle of Safeguarding, would it not be entirely in order to refer to the number of people in the different industries which have been affected by Safeguarding.

The CHAIRMAN: It is my duty to point out that if the Minister of Labour makes any such statement regarding the policy of Safeguarding the Opposition may be entitled to ask leave to controvert it, and that would be wide of the Resolution.

Miss BONDFIELD: There are two other groups of figures to which I want to draw the attention of the Committee. In the motor vehicle and silk industry groups the increased unemployment since December last is something under 11,000 on the register; that is, the increase in unemployment in these two industries combined is something under 11,000. Therefore, the 50,000 and this 11,000 does not explain away or account for the abnormal increase. We are therefore bound to say, and no one will attempt to refute the statement, that the phenomenal rise in unemployment is due to world causes which have had an immediate effect in this country, the seat of which is to be found in the headlong fall in commodity prices. The position has been aggravated by the heavy unemployment in the cotton industry, and it may interest the House to have two groups of figures in connection with this matter. We have made a complete analysis of the cotton industry. During the whole year there has been a tidal wave of short time. The figures have risen steeply as a result of this abnormal position, and we have this position to-day as compared with the position in February last year. The cotton trade was not happy in February of last year, when the total measure of unemployment was 11.9. That was on the 25th February. On the 24th February this year we find that the figures have risen steeply to 24.2.

Dr. VERNON DAVIES: Can the right hon. Lady give us the actual figures?

Miss BONDFIELD: Yes. The total number of unemployed in the cotton trade on the 25th February, 1929, was 66,025, and on the 24th February, 1930, 134,309. Of that number 90,000 are women engages in the textile trade. The importance of these figures is that those who are temporarily out of work or permanently unemployed in the cotton industry are fully paid-up members of the Unemployment Insurance Fund. They are all people who are regular contributors to that Fund and there is no question of their not receiving the benefits to which they are entitled.
Given this position at the moment we have now to consider what is to be done. It is perfectly obvious that the House would not allow the Fund to go
bankrupt. There are four courses which I have considered and examined with the greatest care—reducing benefits; increasing contributions, further grants from the Exchequer, and increased borrowings. The benefits paid under the Unemployment Insurance Act have been settled so recently by Parliament that I think it is inconceivable that any Minister could come to the House and ask for a reduction of benefits at this time, and, in any case, I hold strongly that if ever we may have to consider a reduction of benefits it should not be a time when industries themselves are suffering from the depression which exists to-day. When the workers of the country get the benefits which are promised them under rationalisation, increased wages and greater security, then the time may come to reconsider the question of the benefits from the Fund. The only effect of doing so now would be to throw back on the Poor Law Authorities, which are unable to bear it, the increased burden of maintaining the able-bodied unemployed.
There is another factor, which in my opinion is an asset to the country, which cannot be demonstrated in figures but which the House I hope will never forget. Hon. Members on this side of the House will probably remember the days when there was no unemployment insurance at all; when we had to hunt for work and when starvation was not a word to be used as it is to-day in a comparative sense, but in an actual and real sense. Some of us took our place at the head of processions of hungry men, not because we had any great faith in the benefit of processions, as such, except to bring before the eyes of the comfortably fed the awful state of wretchedness and poverty, but because we felt that unless we led them through the streets and into the parks, where they would he safe, there would be no other way but violence and unrestrained action, with unhappy results to those who participated in any riot. We are safe from that to-day, and in Lancashire during this long period of depression it has been largely due to the fact that they have been able to depend on the payments from the Unemployment Insurance Fund. The decrease of benefits, therefore, as a remedy is ruled out.
With regard to increasing the contributions, I would have been quite prepared to come to this Committee and ask for them to reconsider the state of the Fund, but, apart from the fact that it would be premature and that we think that this peak of unemployment is abnormal and in all probability the situation will readjust itself, and unemployment is bound to show a diminution in the near future, there is the outstanding fact that to increase contributions now would be to penalise industry just at a time when it is struggling ever a period of reconstruction, and it would probably result in a postponement of the recovery of industries to a healthy state of normal trade. Therefore, that solution was also dismissed.
There was the question of a further grant from the Exchequer. I have already informed the Committee that the Exchequer has practically doubled its contribution. It has placed the Exchequer contribution on a basis of equal thirds, and it has transferred to the Exchequer the liability for the non-insurance part of the Fund's burden. Frankly, I could not find any reasonable basis on which I could go to the Exchequer and ask for a further direct grant of money. No doubt, in view of the general financial position, even if I had been able to establish this basis my right hon. Friend would have given one of his most emphatic "Noes." I have, therefore, been driven to the fourth expedient. For the satisfaction of the Opposition let me quote extracts from a speech which I made on that subject when it was before the House last year. On 21st November, speaking in criticism of the late Government's policy, I said:
There is one other course which the party opposite might follow. They might borrow, despite the fact that this would involve asking the House to extend the statutory limit which they themselves set. This is the course that they have always followed, and I suppose they would continue to follow it to the hitter end. Admittedly, this would benefit the taxpayer, who already receives just under £2,000,000 a year in interest from this bankrupt fund. but would any reasonable man suggest that the right solution of this problem is to add £8,500,000 to the Fund's debt, and £425,000 a year to the interest which it is compelled to pay?"—[OFFICIAL REPORT, 21st November, 1929; cols. 751 and 752, Vol. 232.]
Let me correct a misunderstanding for which I am responsible in connection with a sentence in that speech. The Treasury,
of course, does not make a profit out of the loan to the Unemployment Insurance Fund. I should have used the word "lender" not "taxpayer." I am glad to have this opportunity of correcting what was an obvious error in that speech. Then on 25th November, I said:
There is the way of the late Government, of extending the margin of borrowing powers. They extended it from £30,000,000 to £40,000,000 and then said it was to go back to £30,000,000 at the end of 1930. Having done it once, they can do it again. If you came forward and wiped out the limit of borrowing powers at £40,000,000 and went on borrowing to £50,000,000 or £60,000,000, it would be a dishonest course, because it would be contracting a debt that you saw no possible way of paying off. Therefore I have dismissed definitely from my consideration any question of increasing the borrowing powers of the fund."—[OFFICIAL REPORT, 25th November, 1929; col. 1103, Vol. 232.]
That was my opinion then; it is my opinion now. I detest this principle of borrowing; but I find myself in the grip of circumstances to which I have to bow my head. When a circumstance such as this has one in its grip at least it should receive the support of the party opposite, because they, after decreasing the annual revenue of the fund by £10,000,000, decided to borrow up to £40,000,000, with a live register of 1,364,000, while the balancing point of their own fund was only 1,000,000.

Mr. CHURCHILL: Do I understand that the Minister admits that she still holds the opinion that the course she is recommending to the Committee is a dishonest one?

Miss BONDFIELD: I am coming to that point. After increasing the annual revenue of the fund by £14,000,000 we have decided to extend the limit of borrowing by £10,000,000, with a live register of 1,600,000, while the balancing point is 1,240,000. This is the point that I have been making and it is the only point. I am prepared to take the lambasting which I expect from the party opposite. Let us assume that it is a rake's progress on both sides of the House. At least I can claim that my rake's progress is under better control and has a more definitely temporary aspect than anything which preceded it from the other side. I take this course with the greatest reluctance. I would call attention to the figures and to the difference which is apparent in the state of the
Fund now compared with its state in the period that I have criticised. A year before the Conservatives left office the debt was £24,690,000. When they left office it was £36,870,000. They had increased the deficit in 12 months by £12,180,000, and they had taken no steps whatever to increase the revenue of the fund. On 15th March, 1930, the debt was £37,450,000, an increase during the 9½ months of only £580,000.
If I had not taken the steps which I took last November to put more money in the Fund the limit of borrowing powers would have been reached months ago. Therefore, speaking from the standpoint of the financing of the Fund, I claim that this Government has done far more than the last to bring the Fund into a more satisfactory state. It is perfectly true that the debt has been increased because of the exceptional rise in the unemployment figure. Apart from that, every statement that I made last November would have been justified and would have corresponded with the actuarial expectations.
How long will this £10,000,000 last? I am not going to prophesy. I have always taken up the position that it is not possible for anyone to foresee what is going to happen to British industry in the next two or three years. Whatever statement is made can only be guesswork. My business as the custodian of the Fund is to make an arithmetical calculation, and that is all that I propose to give to the Committee. With an average live register of 1,500,000 the £10,000,000 will last until the beginning of 1931. On the other hand, if the live register remains at or about 1,600,000 the £10,000,000 will be exhausted by November next, and in that case I shall have to come to the House again to reconsider the situation before the rising for the Summer Recess. I am perfectly frank about it. The situation is going to be scrutinised week by week. I have already taken steps to have the closest analysis made with regard to the various categories of recipients of the Fund. We have already had a most careful analysis of the dock situation. We are making the same analysis for the cotton industry and of married women's claims on the Fund. Other groups of industries will be taken into account in the same way, so that we may be able to present to the House an exact statement, so far
as statistics can give it, of the direction in which the money goes and the cost in each particular group.
As to the activities on the other side of the account, it will be some months, I think, before it will be possible to give a clear picture of the effect of the new adjudicating machinery, of the principle of decentralisation and local co-ordination which is now in active operation—that is to say, the principle of co-ordination which will start simultaneously with the setting up of the Public Assistance Committees. It is being worked in in relation to the general question. We shall not be able to tell the effect of the new adjudicating machinery certainly for some months, but I hope that before the House rises we shall be able to give some firm figures with regard to this matter. There is, of course, on the other side, the possibilities of the results of increased activity on the placing side of Exchange work, of which a great feature was made in the Debates on the last Unemployment Insurance Measure.
It is clear that all these factors will have their effects, one way or the other, and until we see what those effects are, it is not possible to come to the House with further proposals, financial or otherwise. With an average live register of 1,240,000 people, the income and expenditure of the Fund will balance. If the live register is less than 1,240,000 the Fund will be able to repay debt; but if, for any considerable period, the live register substantially exceeds 1,240,000, then the relation between the revenue and expenditure of the Fund will have to be reexamined and it may be that to establish the equilibrium of the Fund, steps will have to be taken to increase contributions. I have made a perfectly frank statement to the Committee; I have given all the facts at my disposal, and I hope that the Committee will give me my Resolution.

Mr. W. S. MORRISON: I am sure that Members in all parts of the Committee view the appearance of this Financial Resolution with profound misgivings and the very frank, and, if I may say so, somewhat bureaucratic speech of the right hon. Lady has done nothing to remove those misgivings. Into the first part of her speech, which dealt with the administration of her Department, I do not
propose to enter. I am quite satisfied, and I have no doubt the house is satisfied, that the actual administrative work is being quite adequately done, that the rubber stamps are being applied in the right places, and that all the details of administration are being carried out with the usual precision. The alarming fact of this Resolution and its meaning, came into the second part of the right hon. Lady's speech, when she had to face the fact that she, on behalf of the Government, was resorting to the practice of borrowing which in the past she has denounced with such bitterness and force. As I understand the matter, apart from raising the contributions, the two methods open to the right hon. Lady and the Chancellor of the Exchequer for dealing with the debt were, either to borrow as they have done, or to get another direct contribution from the Exchequer. For my part, I always prefer the borrowing course, if we can assume that we are facing a temporary depression and a temporary peak in the figures of unemployment.
I think that a Fund of this kind can safely borrow up to a year's income without, in any way, imperilling its integrity, but that, most emphatically, has not been the view expressed by hon. and right hon. Gentlemen opposite. They have always professed to regard this borrowing, which relieves the taxpayer in a time of depression from raising new money, as being on a somewhat lower moral plane from the point of view of financial integrity than anything to which they themselves would stoop. I am not gong to refer back to the Debates of 1928 and the indignation which was forcibly expressed when the limit of borrowing was raised from £30,000,000 to £40,000,000. I was not in the House at that time, and I leave those who were here to deal with that matter. Besides, the right hon. Lady has, to a great extent, disarmed criticism by her very frank avowal and her withdrawal of the words which she used on that occasion. For my part, I propose merely to refer to what has happened here since I have had the honour of being a Member of this House. We have heard the distresses of this Fund attributed to the depredations of the right hon. Gentleman, the Member for Epping (Mr. Churchill). It has been said that his
action in borrowing instead of taxing, was "robbing the Fund" and he has been held up to us as "the man who robbed the Insurance Fund."
When 1 heard that language I formed a picture of the right hon Gentleman's activities which, I have no doubt, was shared by many equally innocent auditors all over the country. I pictured the right hon. Gentleman, during his tenure of office, penetrating into the vaults of the Treasury, by night and alone, his familiar and distinguished features partly hidden by a mask, armed with a crowbar, and a dark lantern his only illuminant. I pictured his remorseless eye going over all the boxes and coffers in those vaults, until he hit upon a coffer marked "Unemployment Insurance Fund". Then he said, "Ha, Ha! and inserted the crowbar; there was a splintering of wood, and off the right hon. Gentleman went with £20,000,000. That is the sort of picture which, to those who still believe that the words of the English language have a certain definite meaning, is always conjured up by this description of the right hon. Gentleman's activities as "robbing the Fund". But it appears that the Fund's accounts were strictly audited at the end of the year and not one penny was missing. No one seems to have lost any money as a result of the right hon. Gentleman's depredations, and, when the facts are exposed, the right hon. Gentleman appears not in the sinister aspect of a robber of the Fund, but as a benevolent and even cherubic gentleman who, in times of stress remitted taxation. Where is the money of which he "robbed the Fund"? It is in the pockets of the taxpayers and of the employers and workmen who contribute to the Fund, and the money is much better there and will fulfil much better purposes there, than it ever conceivably could under the control of right hon. Gentleman opposite.
If the right hon. Lady and the right hon. Gentleman the Chancellor of the Exchequer will permit me to say so, I have always considered that this matter is symptomatic of their whole attitude on unemployment. There is a certain doctrinaire and school-masterish type of mind—I am afraid the word "pedagogic" is now patented in this assembly—whose emotions and affections are much more readily roused by something
abstract like a fund, than by something concrete like a taxpayer, and it is the case that, while right hon. Gentlemen opposite have always guarded the Fund with the greatest care, they have always been quite willing that the taxpayer should be mulcted in order to swell the balance in that Fund. That is the attitude which they have persistently adopted. They have always believed that to tax is better than to borrow. They have a sort of delight in taxation for its own sweet sake, and they prefer to cherish an abstract thing like a fund, rather than to cherish anything so concrete and real and, therefore, so unimportant as an ordinary taxpayer. Even in this Parliament we have had two Bills carrying out that same policy. We were told with no little horn-blowing and self-congratulation that the steps taken by the Government, by increasing the direct Exchequer contribution, were going to put the Fund into a state of solvency and that there would be no need to resort to the despised expedient of borrowing.
The Chancellor of the Exchequer on the Third Reading of the last Unemployment Insurance Bill only three months ago—only 90 days ago—told us how he had scornfully rejected the expedient of borrowing. He was not going to rob the Fund—not he! He was only going to mulct the taxpayer. He raised on that occasion and on a previous occasion enormous direct levies from the Treasury, every penny of which must be borne out of taxation. He raised these great levies, he doubled the direct Exchequer contribution to the Fund, as the right hon. Lady has told us, and we all anticipated from his statement that there would be no more borrowing. There was an Amendment on that occasion, moved from these benches, which declined to give support to a Bill the provisions of which, we said, were bound to put the Fund into a deficit, and the right hon. Gentleman, replying, characterised that Amendment as audacious Well, who was right? Here is a deficit within three months, after 90 days. These great levies, this doubling of the direct Exchequer contribution, have not sufficed. He has taxed, but now he must borrow in addition. He must, resort to the expedient on which he poured scorn; and what is the meaning of all this?
Surely the only conclusion from any analysis of these events is that His Majesty's Government have all along grossly miscalculated the situation, that when we had these financial figures given to us in December last they were given with a complete misapprehension of the depth and gravity of the problem which they were trying to solve. They had no idea of the commitments into which they were entering on behalf of the people of this country, and it is, to my mind, the most alarming and the most serious aspect of this Financial Resolution, this complete change of financial front, that we are now forced to the conclusion that in three months the calculations of the right hon. Gentleman have all gone astray. The puny defences which he raised against undue raiding of the Fund have been overleaped by an increasing and mounting army of unemployed. No longer does the right hon. Gentleman opposite control the situation. There is a complete lack of control of the whole unemployment situation, a complete lack of grip, of understanding, and of control. They are borne down by a stampede to the Employment Exchanges, and it is a most alarming situation, which no one can view without grave concern.
For my part, if the right hon. Gentlemen opposite were following some consistent but wrong-headed policy, if my grievance was that I did not agree with their policy, I should have a less feeling of alarm than I have to-day, because I am always quite willing to consider that they may be right in their view of policy and that I may be wrong in my view, but when I see them following no consistent policy at all, it is not wrong policy that we complain of, it is the fact that the right hon. Gentlemen opposite have got no policy at all. It seems that we are bound to ask, that being the case, how long it is to go on. Have we touched bottom yet? If they were wrong three months ago, so wrong that they have completely to change their financial attitude, how do we know that to-day the figures that we are being given and the hopes that are being held out of this terrible drain on the country's resources being nearly at its end bear the slightest relation to the fact? Have we any confidence, can the country have any confidence, can hon. Members opposite have
any confidence that their own Government understand this momentous problem, that they are taking any steps to deal with it, and that they can give us any assurance how far the country requires to be committed to it?
The right hon. Lady, in the course of her speech, mentioned that in December, before Christmas, there was nothing to indicate the present alarming increase in the number of unemployed. But the very factors which she now puts before us as causing that increase were plainly evident and patent to observation before Christmas. If the troubles of the country at present with regard to unemployment are due to the two factors which she mentioned, namely, the fall in commodity prices and the slump 12 n. in America, these things were evident to any clear-sighted Government in December. They were then existent, and it is idle to come here and say that no one could have foreseen this, when the very causes to which she has ascribed this unemployment were those which took place before Christmas when she produced the last Bill. Let us consider for a moment what are the pleas that are put forward on behalf of the Government by the right hon. Lady and the Lord Privy Seal as accounting for this terrific increase in the number of the unemployed. We hear a great deal about rationalisation being responsible. One would almost think, to hear right hon. Members opposite, that rationalisation of industry commenced on 30th May last, and that there was no rationalisation before then, but surely it is obvious that throughout the whole of 1929, and for several years previous to that, the process of rationalisation had been going on and that no change as all took place in that respect simply because right hon. Members opposite achieved office. And it is the fact that during the first five months of 1929—

Whereupon the GRNTE FMAN USHER OF THE BLACK ROD being come with a Message, the CHAIRMAN left the Chair.

Mr. SPEAKER resumed the Chair.

Orders of the Day — ROYAL ASSENT.

Message to attend the Lords Commissioners.

The House went; and, having returned,

Mr. SPEAKER announced the Royal Assent to—

1. Consolidated Fund (No. 3) Act, 1930.
2. Ministry of Health Provisional Order Confirmation (Conway and Penmaenmawr Joint Hospital District) Act, 1930.
3. Dundee Corporation (General Powers) Order Confirmation Act, 1930.

Orders of the Day — UNEMPLOYMENT INSURANCE (No. 3) [MONEY].

Again considered in Committee.

[Mr. ROBERT YOUNG in the Chair.]

Question again proposed.

Mr. W. S. MORRISON: I was endeavouring, when we were interrupted, to advance the three causes which are put forward at the present moment as those world forces behind which the present administration attempts to shelter itself for its failure to deal with unemployment. The first of these was the question of rationalisation, and I was in process of pointing out that the fallacy of advancing rationalisation as the cause of the present high figures lies in the fact that rationalisation is a continuous process, and that in 1929 the process was going on, as far as we have any evidence, just as rapidly as at the present moment. There is no evidence to the contrary. We do not know how far rationalisation is going on. We hear it talked about and bandied across the Floor of this House, but we never have any evidence as to how far industry is undergoing this change. In the first five months of 1929, while the Government of the country was entrusted to my right hon. Friends on this side, there was a fall in the number of those unemployed amounting to 350,000. After the election, from 1st June to the end of the year, there was a rise in the number of unemployed amounting to 400,000. That process has continued with increasing momentum to this day.
How far is rationalisation going on? I do not profess to be an expert on finance or difficult matters of that kind, but I venture to express a doubt whether this process of rationalisation is going on to the extent that is commonly supposed.
It is clear that, if industries are rationalising themselves, they will require money to buy the new plant to carry out the re-organisation which rationalisation involves; and if at this moment we saw a steady stream of capital into British industry, that would be an indication that rationalisation was going on. When, however, we see the opposite symptoms, when we see people putting their money, not into industries, but into the banks, when we see a boom, not in industrial securities, but in gilt-edged securities, surely, if any lesson can be deduced from that, it is that the capital necessary for rationalisation is not forthcoming, and that the investor has lost faith in British industry. He is putting his money into the banks and into gilt-edged securities—those dug-out of capital. [HON. MEMBERS: "Hear, hear!"] Before Hon. Members opposite indulge in premature applause, let them consider who is responsible. If the country was so governed that its industries saw some prospects of reaping where they have sown, we should not have this symptom. It is simply due to the fact that you have at the present moment this unfortunate country under the sway of a Government without a policy that lasts for more than a fortnight at a time, and unable to control their own destiny because of the forces around and within them. These are symptoms which lead me greatly to suspect whether capital is flowing into industry in the way that rationalisation would imply. If rationalisation has, in fact, slowed down since these conditions of uncertainty occurred, what becomes of the excuse that rationalisation is the cause of unemployment?
The second plea which one frequently hears is a fall in world commodity prices. Let us have a little analysis from one aspect. I always thought that it was the case for Free Trade than an abundance of cheap food and raw material was the very first essential to commercial prosperity. After all, we are not a country that deals largely in primary products; we are a manufacturing country, whose duty and function in the world has been and is to work up the primary products into manufactured articles which we export. A glut of raw materials, so far from hurting us, should help us if the Free Trade fiscal theory be true. When hon. Members opposite blame this cheapness of raw material and
of food for the present difficulties and distresses of the country, it ought to help them to consider whether a fiscal theory founded on that assumption is right, or may not conceivably be wrong. It is obvious that it is possible to have distress in industry and poverty among the people while there is a glut of primary products and cheap food and raw materials— [Interruption]. It always will be so until a sufficient number of hon. Members opposite, instead of merely running away from that proposition, direct their industrial experience and their intelligence.

The CHAIRMAN: The hon. Gentleman is going rather wide from the Money Resolution before the Gommittee.

Mr. MORRISON: I beg pardon; I was led away by the interruptions from the other side. The sole point which I wish to make on this matter is that, if the low prices of primary materials and food is the cause of our unemployment, then the obvious cure is to take steps to control that danger. It is certainly an argument for examining, not from a political point of view, but from an economic point of view, whether the cause of unemployment may not be the unfortunate fiscal system under which we live at the present time.
Then we are told that the slump in America has had something to do with it. All I can say about that is that, if hon. gents opposite are content to have this country so free and so unguarded from outside explosive influences, that every shock that takes place in America must reverberate in the homes of our work-people, it is time that they reconsidered their fiscal theory. When hon. Gentlemen ascribe our present distresses to the slump in America, they are in the position of a man sitting in a chilly draught and bemoaning his fate, when all that he needs to do is to get up and shut the door.
It is obvious to the country and to hon. Members opposite that the whole history of the Government, in their attempts to deal with unemployment, has been one of a singularly unfortunate character. First of all, we had the drums and trumpets on their accession to office, and then the disillusionment that followed on the part of the people. Now we have
the peak in unemployment for eight years, we are asked to face an unprecedented debt upon the beloved Fund, and, in spite of heavy taxes and great subventions from the Treasury, we have to resort to further borrowing. I say with great sorrow that all that arises from an analysis of the whole history of the Government in connection with unemplopment is that they have constantly fumbled and bungled the whole problem, and have never understood it from the start.
It is useless to blame the Lord Privy Seal. He is not so much a Minister as a political device intended to side track criticism from its proper target, namely, the head of the Government and the whole Administration. What can he do? He is invested with no executive powers, except that of manipulating to some extent the Unemployment Grants Committee. How can he be supposed to deal with the problem which has so many roots? His colleagues around him impose penal and crushing taxation, which increases unemployment, but the Lord Privy Seal has nothing to do with taxation. If they introduce a Bill which threatens our industries with dear coal, that has a bad effect on unemployment, but the Lord Privy Seal has nothing to do with coal; that is the job of the President of the Board of Trade arid the Minister of Mines. In examining his position, one is forced to the conclusion that it is a most unfair and false position for the right hon. Gentleman to be in. No one but a man of intense loyalty and good humour would have stuck to the position as long as he has done.
The whole causes of the present trouble are to be found in the Administration as a whole—their lack of plans, their loss of grip, their inability to envisage the situation at all, the threats of heavy and crushing taxation by the Chancellor of the Exchequer, reverberated upon every platform by hon. Members opposite, the threat of dear coal, and the unascertained liability of this Unemployment Fund. All these are matters which aggravate unemployment as, nothing else can do. This whole policy of attempting to thrust one section of the population on to the backs of another is productive of nothing but—[Interruption]. Hon. Members opposite may say that it cuts both ways. If they believe it cuts both
ways it is time they considered their position in the matter to which I am alluding. This has been a very good Government for those whose sole hope and interest in life is to draw unemployment benefit. [An HON. MEMBER: "Disgusting."] But it is a very bad Government for those who want work.

Mr. SANDERS: On a point of Order. Is it in order for the hon. Member to insult men who are out of work at the present time?

The CHAIRMAN: That is not a point of Order.

Mr. MORRISON: On that observation, may I be permitted to say that I had no intention whatever—[Interruption]. If the hon. Member interrupts me he must allow me to reply to his interruption. Let me say that I had no intention of insulting them—[Interruption]. All I say is that this is a very good Government for those who are in receipt of unemployment benefit. The right hon. Lady herself took credit, as she well might, for the increased benefits, and so on. In that way the Government have dealt with that section of people, but I say it is a bad Government for the normal man who wants to work. Hon. Members opposite will not take advice from me, and it would be presumptuous for me to offer it, but the best that I could advise them would be to continue unchanged with their present course of policy until they have increased the numbers of those who are in receipt of unemployment benefit to a figure larger than the number of persons at present at work in this country. In my submission. only such a conclusion can save them from extinction at the polls when the time comes to appeal to the people.

Mr. ERNEST BROWN: I think the Committee will agree that only a Member who was new to these debates could have made the speech to which we have just listened. We were interested in, and, indeed, admired, the early part of the speech. I admire very greatly the gifts of the hon. Member, who has had some connection with Leith, but I wish he would pay a visit or two with me to that old port, where he found his wife, before he makes the statement about unem-
ployed people that their only interest in life is drawing unemployment pay. [HON. MEMBERS: "He did not say that."]

Mr. SANDERS: He did.

Mr. BROWN: I took down his words as my hon. Friend spoke, and I did not interrupt him because I intended to reply to his statement. A statement like that ought to have a reply. His words were "Whose only interest in life is in drawing unemployment pay".

Mr. W. S. MORRISON: I am certain my hon. Friend does not wish to be unfair.

Mr. BROWN: Quite so.

Mr. MORRISON: My words were that this was a very good Government to those whose only interest in life was to get unemployment benefit [Interruption]. But allow me to say this, that it is the hon. Member himself and those who misunderstand me who are insulting the working people of this country—[An HON. MEMBER: "Rubbish"]—by suggesting that they are all of that class.

Mr. BROWN: The hon. Member and the Committee know me well enough to know that I would never willingly do an injustice to another hon. Member. The OFFICIAL REPORT will judge between us. He says that he did not express himself in the way that I think he did, but I took the words down at once. It is very interesting to notice that the hon. Member has been chosen to open the debate for the party above the gangway, and for two reasons; first of all because he is a member who is new to these debates, and, secondly, because of the constituency for which he sits. I have made this complaint more than once in this House. I have made it about the right hon. Gentleman the Member for Tamworth (Sir A. Steel-Maitland). Like so many hon. Members above the gangway, they sit for constituencies where there is very little experience of the grim tragedy of unemployment. If I take the figures of unemployment for February last and look up Cirencester, I find that the unemployment figure in Cirencester is 9 per cent. There is all the difference between 9 per cent. in Cirencester and 19.7 per cent. in Leith. That fact alone must make a very great difference to one's outlook on the problem.
With regard to the first part of the speech, we were all amused and interested. He spoke of the right hon. Gentleman as a burglar, as a very strong man. I have always regarded the right hon. Gentleman as strong, but I never suspected that he was strong enough to carry away on one journey —20,000,000 of money on his back, even with the aid of a dark lantern and a crowbar. [Interruption.] An hon. Member says it is funny. It is just as funny as the illustration was. We must look for another serial story, after Edgar Wallace's has finished in the "Daily Herald," about Winstons' dark deeds with a dark lantern. [interruption.] I am allowed to quote. My hon. Friend does not mind that. He knows that is not merely a title of affection, but a title of pride.
When the hon. Member got down to the Fund, he was very unfortunate. He said that right hon. and hon. Members opposite were concerned not with the taxpayers but with abstract things like the Fund. But a concrete thing like the taxpayer may be two things; he may be a concrete taxpayer and also a concrete unemployed man, in which case he will not find the Unemployment Fund an abstract thing at all, but a very vital thing, both for himself, his wife and his children. We are not discussing an abstract problem now, but a problem which affects not merely the whole foundation of this country, a problem which affects with menacing force 1,500,000 men and women directly, and another 2,000,000 or 3,000,000 indirectly in their homes.
My complaint against the right hon. lady is not based on what is contained in the statement, though I agree with the hon. Member for Cirencester (Mr W. S. Morrison) that the whole House must watch the growing figure of unemployment with misgiving, and must also watch the production of a new Financial Resolution for borrowing with misgiving. I am concerned with the absence from the statement of two other things which ought to be in it. We have had an analysis, but we have had no statement as to the number of persons who will be removed from the unemployment roll owing to the activities of the Government in finding them employment.
Another thing I notice is absent, and that is that there is no reference in the speech of the Minister of Labour to the committee of inquiry which has been sitting for some months dealing with this problem. I hope that before this Debate finishes we shall have some information upon that subject.
We were told in the Debate on the last Bill that two things were required. In the first place, that an analysis was to be made of the complex problems, to which schemes developed on independent lines inevitably give rise; and, secondly, that we should have an opportunity of examining the gaps and inadequacies of the present scheme and an opportunity of considering the full relationship between unemployment insurance and other forms of social provision. If the Parliamentary Secretary to the Ministry of Labour as going to reply, I hope he will give us some information as to what progress is being made in regard to this survey. I think we ought to have this information, especially when we are being asked to sanction an expenditure of —10,000,000 more. The hon. Member for Cirencester talked about robbery. I have never charged the Chancellor of the Exchequer with robbery, but I would like to call attention to 16 & 17 Geo. V, chapter 8, and Part 2 of the Schedule which alters the rates of contribution to the Unemployment Fund and which has been taken as the basis for charging the liability as to the unsoundness of the Fund in its operations. It is called the Economy Act of 1921, and that is being used as an argument against the right hon. Gentleman the Member for Epping (Mr. Churchill).
I would go further and say that while we are expecting to have continuous denunciations and defences on one side and the other as to who was in office at the time, all I can say is that I have never joined in those denunciations of the right hon. Gentleman, and every time I have spoken on this problem in the House during three Parliaments I have been concerned with only one thing, and that has been what practical steps we can take to obviate the production of such Financial Resolution as we are considering to-day.
Certainly, the last Members of this House who are entitled to complain on
that score are the hon. Members sitting above the Gangway. This is the 23rd Bill of this kind which we have had since 1920. I remember quite well discussing the Bill of 1927 and 1928, and at that time the tone of hon. and right hon. Gentlemen above the Gangway was very different from that which they have adopted to-day. The Minister of Labour was accused of being optimistic six months ago, but the late Prime Minister was equally optimistic in 1928, and I remember that on the last day of the Session of 1928 when we were discussing the question of the transference of miners from the distressed areas to other areas the right hon. Gentleman the Member for Bewdley (Mr. S. Baldwin) said:
I would say here that neither this nor any Government can do everything without the help of the community. The whole community more than ever is required to help in this matter, and the most effective way in which the community can help is for employers to take in someone, if only one man, who comes from these areas where, as far as we can see, he will never get employment, and get him into a district where he can hope to have it. Because, after all, let us not forget that, with the exception of these black spots, the country as a whole is prosperous, and on that I would say further without fear of contradiction, that over the main part of this country the standard of living is higher today than it is in any other country in Europe."—[OFFICTAL REPORT. 20th December, 1928; col. 3275, Vol. 223.]
That was the point of view taken by the Opposition in 1928. The assumption was that you could make one standard scheme for benefit, and it was called un-covenanted benefit and later on extended benefit. It was assumed that you could place every man on the register on the basis of 30 contributions, and, when it was pointed out that the assumption was rather optimistic, the right hon. Gentleman told us that we might very well look forward to unemployment as less than 8 per cent. by 1932. What was proposed then was based on the assumption that the decrease in unemployment would take place earlier, and the right hon. Gentleman put in some precautionary words. At that time, I moved an Amendment to the effect that the 30 contributions should not operate on the live register under 6 per cent., which was the figure given by the actuary in the report of the Blanesburgh Committee, but my Amendment was regarded as being un-
necessary, and it was voted down as being entirely pessimistic in reference to this problem.
No good can come to the country by indulging in that kind of argument. What the country requires is a Government which will boldly face the problem of the abnormal element of the live register, and set itself strenuously to do everything to develop our natural resources, so that hundreds and thousands of people may be taken off the Fund and put to doing productive work. Then there would be no need to come to the House for permission to borrow —20,000,000, —30,000,000 or —40,000,000.
Hon. Members above the Gangway have no suggestions to make to deal with this problem. All that they can do is to refer to the taxes, and talk about broadening the basis of taxation, but that is no solution of the problem. It would not be in order for me to discuss the question of taxation. We are all aware that complaints have been frequently made about the enormous burden of taxation, and the sole constructive suggestion which has been put forward by hon. Members above the Gangway seems to be to pile up more taxation not merely for revenue purposes but for a double purpose in order that the Chancellor of the Exchequer himself may raise taxes and levy that taxation on his fellow men, including those very poor people who would be affected if the taxation of food is granted.
I am bound to say in fairness to the present Government that, as regards actual provision of employment, their attitude has been, in my judgment, a wiser one than that of the previous Government. The Economy Act was followed by an Economy Circular, which, as everyone knows, stultified almost entirely the work of the Unemployment Grants Committee. It would not be fair for me to speak on this matter in this Debate, because I have made so many complaints, but I must say that things are better now as regards this matter than when the Government came in. That is not to say that we are satisfied; the progress is too slow. I have here a letter from the Dock Commissioners of Leith, and I am hoping this week-end to get a settlement on a question of work for Leith—not on the scale that we hoped last June, but on a very small scale—[Interruption.]. It is quite true that
half-a-loaf is better than no bread, but this will not even be half a loaf. It will not be more than a fifth of a loaf, but it is better than no bread at all. As regards the Unemployment Grants Committee the Government say that they are alive to the necessity for helping local authorities of all kinds, including municipalities and statutory authorities like my own Dock Authority at Leith, to do all they can, but what we lack in this House is any statement from the Government as to what their own policy is in regard to their own schemes, as apart from helping local authorities to produce their own schemes.
There is a trio charged with the duty of providing work, and what we should like to know, and what I think we are entitled to know, is this: Nine months have gone by, and we are entitled to know how many men the Government expect to be placed in employment within the next three months, before the summer arrives, by the activities of the Lord Privy Seal and his colleagues. The other day, when the Lord Privy Seal himself was speaking, he said that time was the solution; and an hon. Friend of mine on these benches said, "If Time is the solution, we had better make him Lord Privy Seal." The fact is that, while the right hon. gentleman has been very busy helping to stimulate the local authorities —and I am glad to acknowledge that—I think he is much too bound up with red tape. I regret his attitude with regard to revenue-producing and non-revenue-producing undertakings, and I regret the distinctions which I understand are now drawn in his office between works of magnitude and works that are not magnitude.
A long circular has been issued, but it is very difficult for Members of this House and for local authorities to grasp the full implications of it until they have made an application. I trust that the result of this last attempt at borrowing may bring home to the mind and conscience, not merely of the Government, but of every Member of this House, the necessity for all Members getting together, pooling their ideas, and determining so far as we can to develop our national resources, whether in the matter of roads, bridges, land work or docks and harbours. That should be done, and
it should be done without any regard to the work which is presently being undertaken through the initiative of local authorities. We have had a lift there, through the reversal of attitude on the part of the present Government, but we have not seen any sign that they have a policy of their own, and that is what the country is looking for.
I have already quoted what the right hon. Gentleman the Member for Bewdley said in the dire year of 1928, and, in conclusion, I should like to be allowed to quote from the present Prime Minister. He was complaining that a great road in Glamorgan was being held up, and that nothing was being done to put miners on the land, and he said this:
The fact of the matter is that if we had to translate from one condition to another any considerable bulk of any one of the industrial classes, one of the simplest things would be to translate a bulk of the miners into a bulk of people engaged on the culture of the land.
Let the Committee mark these words:
One of the simplest things would he to translate a bulk of the miners into a bulk of people engaged on the culture of the land. When one has seen the gardens where some of the old miners' villages exist, before that abomination of hardness and unimaginativeness, the more modern miners' village … one sees the miners equally at home in cultivating the soil as exploiting the coal face." Here again, how profound is one's regret—it is a matter not merely of accusation against the Government, but it is a most sincere regret—that during all these years when this thing must have been foreseen, when it was foreseen, we have made no real, determined preparations in the transference of these people from the bowels of the earth to the surface of the earth in order to produce wealth and develop our own national resources."—[OFFICIAL, REPORT, 20th December, 1923; cols. 3289–90, Vol. 223.]
That I commend to the consideration of the Prime Minister and of the Lord Privy Seal. If it was simple to do that then, surely it is simple to do it now. Whether it be simple or not I am here to say this. [Interruption.] An hon. Member asks, what about the majority? I tell him that there is a majority in this House for any reasoned, constructive scheme for productive work on a bold and imaginative scale, and that majority should be used for this purpose, and used quickly, for the nation cannot stand this sum total of human misery which is implied in an unemployment figure of 1,600,000, nor can the taxpayer stand this continued drain
of borrowing by Resolutions of this kind, or the alternative of a broadening of the basis of taxation.

Mr. CECIL WILSON: The hon. Member for Cirencester (Mr. W. S. Morrison), who raised this discussion, has in his area 2,580 insured persons. In my area there are 167,000 insured persons. According to the last return, the number of men unemployed in the hon. Member's area is 238, while in mine, according to a return that I have this morning, it is 32,000. I wish that the hon. Member would endeavour, with all the ability which he possesses, to envisage the position of those of us who come from areas of this character. I would ask him, further, whether there is a single one of the 238 people who are unemployed in his area who is going to be one penny the better off for his speech this morning. I would ask him to consider, not so much the question of money, but the whole question of the men, women and children who are now suffering. The report of the Balfour Committee on Industry and Trade dealt with the question of not genuinely seeking work, and, in regard to that, the Committee say:
To justify the denial of unemployment benefit to an insured person on the ground that he has refused employment it is necessary that the employment so refused should be 'suitable'; and, without entering into the definition of this term resulting from the provisions of the Unemployment Insurance Acts and the decisions of the Umpire thereunder, it may be said broadly that the question of 'suitability' is in the main determined by reference to the man's habitual employment, earnings, and place of residence. There are a number of qualifications of the broad statement made above, but they do not affect its general validity.
There is no question that the Balfour Committee were quite clear that the charge which has been so generally made that there are upon the Fund a number of those who did not want work was entirely unjustified. It may be that, in the course of this Debate, the question may be raised as to the effect upon the cost of production of the employer's contribution, and, in regard to that, the Balfour committee said:—
It was shown in our 'Factors in Industrial and Commercial Efficiency' that the employers' contributions to the Unemployment Fund represent negligible addition (averaging much less than 1 per cent.) to the total cost of production, and we are
satisfied that on the whole the resulting advantage to them has very greatly exceeded any burden of this kind.
Those of us who represent distressed areas in the more heavily hit parts of the country, when we consider some of the actual experiences of our employment exchanges, find this kind of thing. I have a letter written in December by the manager of the exchange in my own constituency, in which he says:—
I wish there were more jobs available for our men; their persistence and importunity do worry one.
It may be perfectly true that there is a certain number of persons who are not genuinely seeking work, but let us judge this question by the very large majority —the vast majority—of people who are genuinely seeking work. May I quote another letter received a few days ago from the same man?
The Attercliffe men submitted to the Committee to-day for consideration in connection with relief jobs are, man with wife and four children not worked since 1925, man with wife and seven children, not worked since March, 1928, man with wife and two children, not worked for 2½ years,
He goes on towards the end of his letter—
'Not normally' in the new Act gives us difficulty at the moment. I have several hundred men receiving poor law relief and in respect of whom I am taking new claims from 13th March who have not had work for nine years. The question arises whether or not these satisfy the normally employed in an insured trade' conditions.
Several hundred men who have not worked for nine years! That is a question affecting not only my constituency but constituencies all over the country. We ask that the matter should be looked at not in the narrow way it frequently is, but in its whole broad perspective. It is. true that this matter of unemployment, whatever Government has been in office, has been far too much bandied about from time to time and the blame put here and put there without our considering the matter in a way in which it can be properly dealt with. An hon. Member opposite asked whether the country can have any confidence in the Government. The question we have to ask ourselves rather is, can the country have any confidence in Parliament, which for a long series of years has shown itself unable to tackle this tremendous question.
1.0 p.m.
Let us put away this bandying about from one side to the other and endeavour to get down to serious matters. Unem-
ployment is no new thing. In 1842 Queen Victoria caused a letter to be written to the Archbishop of Canterbury asking for a collection in aid of subscriptions for the relief of the working classes of England and Scotland, and in that letter called attention to the severe distress in some districts which many of the working classes have suffered and continue to suffer. A few months later a return was presented to Parliament showing the amount of contributions that have been made between 1825 and 1842 1.0 p.m. for the relief of distress. Explanations given in that connection were "distress occasioned by want of employment," "distress arising from scarcity of food and want of employment," and so on. Coming down to some years later, there is the statement of Professor Leone Levi in 1867 in which he said the time wasted or duriing which no wages are earned may safely be estimated on the average at four weeks in 52. That statement was taken up by an eminent member of the Royal Statistical Society who said he thought the figures were not four weeks but were very much nearer 10.
Let us try to visualise what it means to the families of the country whose wage-earners are unable to find employment. Returns from the Ministry of Labour show that during the last few years the number of weeks lost owing to unemployment has amounted to 63,000,000. If that figure is divided by the number of insured persons it averages not less than five weeks for the whole insured population. That is a very serious position in which to find ourselves. In 1904 a report issued by the Board of Trade said:
The average level of employment during the past four years has been almost exactly the same as the average of the preceding 40 years.
That goes back to the time of Professor Leone Levi's return. During the whole of that time, except when there was a great improvement in trade, there was very serious and continuous unemployment. During the last nine years, leaving out 1926 because that is rather special, there were only four weeks during the whole period when the number on the register has been less than 1,000,000. That is certainly a very serious position which calls for the most serious attention.
This is really no new problem at all. Mr. Keir Hardie, who was spoken of as the member for the unemployed, in his maiden speech in 1893 said that one of the most harrowing features connected with unemployment was not the poverty and the hardship that they had to endure, but the fearful moral degradation that followed in the wake of enforced idleness, and there was no more pitiable spectacle in the world than a man willing to work who day after day vainly begged a brother of the earth to give him leave to toil. That position of affairs is just as striking to-day except for the fact that there is a certain amount of unemployment benefit being received, but what does that amount to? Is there not the same degradation and demoralisation of families, physical and moral, going on just as much as nearly 40 years ago, and the responsibility is really ours unless we can see some means of tackling it. In 1917 and 1918 the Archbishops had a certain number of Commissions of Inquiry, and in the report of their fifth Committee of Inquiry on Christianity and Industrial Problems we find these words:
fWe need only to point out that in almost all industries at some time, and in some industries at almost all times, there is a margin of unemployed workers who not only undergo, in the persons of themselves and their families severe physical privation and acute mental suffering, hut who drag down the whole standard of life of their fellows. An organisation of industry which allows men who are capable of working and willing to work to be deprived of adequate means of livelihood through no fault el their own is contrary to the first principles of justice, and is, therefore, contrary to the principles of Christianity.
It really is time that we faced this question in a very different way from the way in which it has been faced before. There has been no change since the time when the Archbishops used these words in that report. Have we coma to the position that we are entirely helpless to deal with this matter, or are we going to have it properly and sincerely faced? While it is true that one-tenth of the insured persons are continually unemployed, we have to remember that as far as the vast bulk of the rest of the population are concerned, they are living in more or less continuous fear as to how soon they may be in the same position. There is a kind of mental anxiety over the whole population which we ought to try and
relieve. We either have or have not responsibility.

Sir A. STEEL-MAITLAND: Are we not entitled in a financial matter of this magnitude, to have a representative of His Majesty's Treasury on the Government Front Bench?

The PARLIAMENTARY SECRETARY to the MINISTER OF LABOUR (Mr. Lawson): May I draw attention to the fact that the Chancellor of the Exchequer has been here during the greater part of the Debate and that he will be here again shortly.

The CHAIRMAN: In any case, the Minister of Labour is responsible for this Motion. I do not see that the presence of a representative of the Treasury is necessary for the purposes of discussion.

Mr. WILSON: I am not so much concerned as to the responsibility of the Front Bench or the responsibility of those who sit on the Benches opposite. Our responsibility is a joint responsibility not only to the unemployed, but to the whole nation. We ought to endeavour to see whether there are any means whereby this matter can be faced in no party spirit in order that that which has been going on in the way of unemployment, not during the last few months or the last few years, but which has been going on for hundreds of years, with its distress, anxiety and degradation can be stopped.

Sir ASSHETON POWNALL: I will not follow the hon. Member for Attercliffe (Mr. C. Wilson) further than to say that for ten years out of the last eleven years it has been my privilege to sit on the opposite side of the House. I have heard most bitter attacks made on the late Government by those now sitting on the Socialist benches with regard to their lack of dealing with the unemployment question, and I cannot help feeling, that it would have been better if the death-bed repentance had come to the party opposite ten years ago rather than in the year 1930, when they are responsible and when the unemployment figure is the highest for eight years.

Mr. WILSON: I think that the hon. Member cannot have heard what I said in the earlier part of my speech, that it was time that this bandying wherever it comes from should cease.

Sir A. POWNALL: Had hon. Members opposite thought like that ten years ago, it might have been a good deal easier than it now is.

Mr. WILSON: I was not here ten years ago.

Sir A. POWNALL: Then I will say, "his friends." It was my good fortune to have the opportunity of asking the first question ever asked at Westminster of a woman Cabinet Minister, and the opportunity of congratulating the right hon. Lady on the proud position which she, the first of her sex, occupied. I am afraid that to-day I am not quite in the mood to congratulate the right hon. Lady. I remember that at that time it was stated in the Press that there was a good deal of diffidence on the part of the right hon. Lady as to what kit should be worn by a woman Privy Councillor. I do not know how the problem has been solved, but I suggest that a white sheet would have been an appropriate costume in which the right hon. Lady should have come to the House. Never in my many years in the House of Commons have I seen a Bill brought in to take effect some three or four months from it becoming law which was already out-of-date by the time that it became law. If you look at the Financial Resolution you will see that the live register shown as on the 10th March, but this Bill does not have effect until the 13th March. In other words, the very provisions which the right hon. Lady had made were actually out-of-date by the time that this Bill came into force. We have seen a good many legislative bantlings brought into being during eleven years, but I have never seen one before coming to life which actually required a further sum of ¢10,000,000 in order to keep it alive. It may be that the right hon. Lady read the prophecies made by the Lord Privy Seal with regard to unemployment at the Conference of the Trade Union Congress some six months ago, when he stated that by February unemployment would be very much reduced, and that she had those promises in mind when she formulated this proposal.
I am not blaming the Lord Privy Seal. I regard him rather as the whipping boy of that quartet, the quartet, who, we gather, do not always sing in chorus on this question. He has recently presented
us, after some considerable delay, with a White Paper with regard to his proposals. I have been at some little pains to anaylse that White Paper to see how many man-years of employment were to be given by the proposals which the Government have brought forward. In page 5, the total is shown as 164,000 man-years. It does not say how long the various schemes—electricity, water and so on—will take to eventuate, but it is not unfair to say that it will be from three to four years. In other words, if we divide 164,000 by 3½, we get about 45,000 as the actual number of men who will be employed in the next three or four years on the schemes set forth. What is 45,000? It is almost exactly the increase which took place this last week in the unemployment figures. For all I know, it may increase again when the Act comes into full force. It is one-fortieth, 2½ per cent., of the total number of those who last Wednesday were shown as being unemployed. So much for the schemes of the party opposite. When I refresh my memory with the wonderful document issued last May, which, over the signature of the present Prime Minister, spoke of immediate schemes of unemployment and gave particulars of half-a-dozen of them, and when I find that they will be responsible, on the showing of the Lord Privy Seal, after ten months, for one-fortieth of the unemployment figure given last Wednesday, I cannot help feeling that my suggestion with regard to the right hon. Lady wearing a white sheet, is not an unhappy one. With regard to what the right hon. Lady said last November with reference to increasing borrowing power, I happened to see the statement reproduced in this morning's "Times," and, no doubt, the right hon. Lady realising that other people might see it, preferred to bring it forward first. She goes on to say in this connection:
It would be contracting a debt that you saw no possible way of paying off."—[OFFICIAL REPORT, 25th November, 1929; col. 1103, Vol. 232.]
I want to know whether this is still the opinion of the right hon. Lady. She is asking for a further £10,000,000 by making the borrowing power £50,000,000. Does she still consider that she is contracting a debt which there is no possible
way of paying off? This is rather an interesting question for the right hon. Lady to answer or for the Chancellor of the Exchequer to answer when he comes to wind up the debate. There are one or two other quotations of the right hon. Lady which are germane to the discussion to-day. I see that as far hack as the 11th July, when she first took office, she said:
The obvious objection to borrowing is that it is merely adding loads to the Insurance Fund and increasing the amount of interest.
It is obvious that the £10,000,000 will increase the amount of interest, roughly speaking, by £1,000,000. She went on to say:
I therefore dismiss the alternative of coming for further borrowing powers."—[OFFICIAL REPORT, 11th July, 1929; col. 1129, Vol. 229.]
On reconsideration in November, she again dismissed the alternative, and now March, four months later, she has apparently reconsidered the question again and taken to borrowing powers. She also went on to say last, November that she was arresting this rake's progress with regard to borrowing. Apparently, the progress is no longer to be arrested, and she is continuing, in a political sense, along the path of the rake's progress of borrowing. The right hon. Lady made a statement which in particularly interesting, corning from one of her sex. She said that she had tried to play the part of the careful housekeeper but that she had not had enough money to do all that she wanted to do. When the "careful housekeeper" promotes a scheme and three or four months later she finds that she wants another £10,000,000 to carry that scheme into execution, I cannot see very much of the power and foresight of the ordinary careful housekeeper.
The whole of this trouble very largely arises from the lack of confidence in the country as a whole. But for the action of the Government in regard to finance during the last ten montbs—I am not going into the question of the general finance of the Government as a whole—we should not have been in our present unfortunate position. You cannot take large sums of money, amounting to £22,000,000, to which the present Government are already committed in connection with the present year's Budget, without making the business people feel
that they do not like to launch out, to increase their commitments, to take on fresh responsibilities and to start fresh processes of manufacture. They feel inclined to say that they will wait and see what the Chancellor of the Exchequer is going to do.
When, on the top of that, there is an extra £14,500,000 required by the Government not to provide work but to provide benefits, the difficulties are accentuated. Responsible people realise that the great danger of the Socialist party is that they have been led astray and that they are particularly concerned in finding what are called doles for the unemployed, when what we want to do is to find work. I do think that had the finance in regard to the unemployed been more wisely used last autumn, the figures would not have been as large as they are to-day. The Chancellor of the Exchequer has had to put up this large sum and the Minister of Labour confesses that she does not think she can ask him for more. The Chancellor of the Exchequer has a very difficult task in regard to these problems. I should like to quote, without offence, from Philip drunk to Philip sober. Speaking on the 8th October, the right hon. Gentleman said:
The fact remains that the total volume of savings is less than pre-war, allowing for the changed value of money, and the saving needs are greater than ever.
He made that statement before he had made the concession of many millions of pounds. His action last November made the need of saving even greater, but he made it more impossible to save. It is very largely owing to the feeling of lack of confidence that we are to-day confronted with the necessity for having to increase the borrowing powers by £10,000,000. The Minister of Labour said last November that she believed her finance to be good, and because the House appreciated sound finance she believed that she would get her Money Resolution. We see now how unsound her finance was. It was so unsound that it could not even last until the 13th March, when her own Act came into operation. She also said, on the 21st November, that she was taking some risks, and that she had then over £2,000,000 to play with. Some of us contend that when you owe £36,000,000 you have not
£2,000,000 to play with, and we thought that she ought not to have taken the risks which she took. She did, however, take the risks, she played with the £2,000,000, and her playtime has proved very expensive to the country as a whole.

Mr. HAYDAY: I cannot help thinking that the hon. Member who has just spoken, together with the hon. Member who spoke first from the Opposition benches, has fallen into some very serious errors in attempting to discredit the Government. The first statement was that within 90 days of the passing of the Act the Government's calculations have gone astray The hon. Member who has just resumed his seat said that he knew of no similar circumstances, that within so short a period of the passing of an Act there should be a request made for borrowing powers. He said that the calculations of the Government had been very unreliable. When the present Opposition were in office, in 1920, they passed an Act in August of that year, one of our Unemployment Acts, and before March, 1921, notwithstanding the fact that they had a surplus of £22,000,000 in hand, by reason of the existence of the 1912 and 1916 Acts, they came to the House and asked for borrowing powers for a further £10,000,000.
Although they had a surplus of £22,000,000 in August, 1920, so much out were they in their calculations that they had to come to the House for powers to borrow another £10,000,000, because the £22,000,000 had gone. They fell into a much more serious error than the present Government, and that error, if it does nothing else, gives them no right to criticise the uncertainty of estimating on the part of the present Government. By July, 1921, the £10,000,000 had proved not to be enough and they came to the House for an extension of the borrowing powers for another £10,000,000. They passed their Act in August, 1920, and started with a surplus of £20,000,000, but before a year had gone they had come to the House and asked for borrowing powers for another £20,000,000, having spent their £22,000,000 surplus. What right had the hon. Member to say that he had never known of a similar set of circumstances. Within a year £42,000,000 was involved when they were in office, and now they criticise the present Govern-
merit because we started with a limit of £4,000,000, they had within 90 days had to ask for borrowing powers for another £10,000,000, or a sum total of of £14,000,000.

Sir A. POWNALL: In three months.

Mr. HAYDAY: As against £42,000,000 in 12 months by the late Government. Therefore, the criticism goes by the board in that respect. When we must from time to time ask for an extension of the Act or an extension of the borrowing powers to meet the obligations of the Act it is heartbreaking to find that keen party spirit must enter into the Debate, and that supporters of the late Government forget the shortcomings of their own Government, and endeavour to discredit the position of the Government in office. We have been told by the Minister of Labour that the reason for this request is because circumstances have entered into the realm of unemployment insurance which could not have been foreseen three months ago. The late Government in 1927 estimated that by the 15th April, 1928, not 1933, as has been suggested, we should be nearer normality in our figure of unemployment, and that the necessity for carrying over the transitional period would not arise. Their calculations proved to be no more than what I submit is the calculation of any Government or any expert with regard to unemployment insurance. It was nothing more than a guess. No one can make any statement to which any degree of reliability can be attached because of the uncertainty of the circumstances which may occur.
The Minister of Labour says that 50,000 of this increase is attributable to the new legislation. I should like to ask whether that number includes those who are now carried over under the transitional period and who have previously been disqualified under the "not genuinely seeking work" Clause. If that 50,000 partly represents these unemployed then it is fair to suppose that within the next week or two, with employment at its present low ebb, the figure must certainly increase to some considerable extent. I agree with the Minister that in order to bring the Fund into a sound financial position the last thing we should think of is to reduce benefits and increase contributions. There are the alternatives of an increased
Government grant, or increased borrowing. The evidence submitted by responsible industrial bodies to all the Commissions which have been set up to inquire into unemployment insurance has always been in favour of a non-contributory scheme based upon the general taxation of the country. If that w as done you would not have these constant applications and misunderstandings as to whether this was an insurance fund or not. I repeat what I have said before, that if ever a Government was responsible for making the present scheme a noncontributory insurance scheme it is the last Conservative Government—

The CHAIRMAN: I hope the hon. Member will not elaborate that point. He must confine his remarks to the question as to whether the £10,000,000 is necesary in order to meet the needs of the case. We cannot discuss the policy of previous Administrations in relation to contributory or non-contributory schemes.

Mr. HAYDAY: I am much obliged, and I will leave that point. The Act of 1921 placed in benefit and upon the Fund all who were able to prove that they had been employed in an industry which was ultimately covered by the Act. They were at once admitted to benefit. The 1918 Act, through the out of work donation scheme, put over 200,000 ex-Service men and marine seamen on to the Unemployment Insurance Fund, transferring a State responsibility in regard to these 200,000 men as a charge against a so-called unemployment insurance fund. That destroyed all semblance of it. Had the State been a one-third contributor from the commencement of the Insurance Acts it would have paid somewhere about £50,000,000 more money than it has paid up to the present. I have made a rough estimate of my own, and as far as I can gather the administration of the Fund has cost another £50,000,000 since the introduction of the Act of 1911. In addition somewhere about £9,000,000 has been charged as interest on money advanced—

Dr. DAVIES: In an answer to a question yesterday, the Minister of Labour said it was just over £6,000,000.

Mr. HAYDAY: In that case £6,000,000 has been charged against the Fund in
interest. That is a total of 106,000,000, because I fee that as long as this is a contributory fund the State should under-take the full responsibility of administration. It is an unfair charge on the funds of the Unemployment Insurance Scheme. The hon. Member for Cirencester (Mr. W. S. Morrison) says that rationalisation has not caused wholesale reductions in the number of men and women employed. I feel that it has had very serious effects on the numbers who are unemployed today. These great amalgamations and absorptions must have that effect. We in the trade union movement are constantly receiving reports through our organisations of whole works being closed down and villages, where such works are situated, made absolutely desolate, because the small shopkeeper, as well as those engaged in the factory is unable to obtain a decent livelihood. Only yesterday we had an example of this when the House was discussing the Glasgow Corporation Bill, where 800 men are likely to be affected. There are circumstances prevailing at the moment which are somewhat difficult to detect. I cannot help feeling that many of the discharges that are taking place have a political significance. The experience that one gets as a trade union official, and the circumstances in which dismissals are taking place, make one feel very anxious as to whether the dismissals have been entirely justified or are being used for some purpose that may affect what is to be made known on 14th April.
There is one further point that I must mention. It must be remembered that in June, 1921, there were over 3,000,000 registered unemployed, apart from miners or others who were out of work during that year because of a dispute. There were 3,000,000 with entitlement to benefit. Since that time there have been fluctuations up and down, and they have been caused by various things. I would like the Government to be more speedy and generous with its sanction, under the Unemployment Grants Committee, of actual work to be commenced. I would like them to do it on such a scale as to throw back on the Opposition the responsibility of criticism,, for indeed the Government have been constantly criticised for not being generous enough, as though they chose to be generous with those who were denied work rather than
generous in the way of providing work. If I were in any sense powerful enough to influence the Government, I would ask them to accept wholesale the majority of the schemes suggeste and to promote schemes themselves. I see no reason why we should not start on main arterial roads and open up a thousand miles of them. That work will put into employment between 250,000 and 300,000 persons. Whatever the grumble from the Opposition I would face that task in view of the criticism that the Government are following the rake's progress in throwing money away and that they prefer to pay unemployment benefit rather than provide work. I would give an opportunity for the Opposition's criticism. The more that is spent in work the less the necessity for spending money in the provision of mere sustenance for the unemployed.
I would re-echo the request of the hon. Member for Leith (Mr. E. Brown) that the Cabinet Committee which is sitting to review the whole of the social insurances should see whether it is not possible to amalgamate these insurances. There are payments deducted from wages, from employers and from the taxpayer, and all three, I suggest, come from one source; they are all an impress upon industry and commerce, whatever designation they might separately be given. There are some funds with a big balance, while another fund is unduly handicapped. There is the class of victim who falls between the separate departments in the transfer from one social service to another. I would ask the Ministry how many people, since the passing of the Contributory Pensions Act, have been taken out of unemployment insurance upon reaching the age of 65 and have been denied benefit for themselves and their dependants in order that only the one 10s. may be paid. There is a similar anomaly on the sickness side. It is time that instead of all this crazy work of the unemployment and social services to meet contingencies that no one can forecast with any certainty, we overhauled our social services and discovered to what extent the State could take over greater responsibility.
The Fund would not be in deficit now if the £50,000,000 representing the difference between what the State has paid and the one-third quota—if a propor-
tion instead of the whole of the administration had been charged against the Fund and the rest had been charged against the general taxpayer of the country. There would have been no need for the £6,000,000 of interest to have been paid and there might have been the possibility of an. increased benefit. But side by side with benefit paying arrangements there must be the promotion of schemes wide enough in scope to deal with the unemployment problem itself and to give men work and wages rather than subsistence allowances because they are unemployed.

Captain AUSTIN HUDSON: I want to refer to two points in the speech of the hon. Member who has just spoken. I think he rather misrepresented my hon. Friend the Member for Cirencester (Mr. W. S. Morrison) on the subject of rationalisation. My hon. Friend did not say that rationalisation had not increased the numbers of unemployed. What he did say was that rationalisation has been going on for a number of years and that the increased unemployment should have shown itself last year or the year before just as, according to some hon. Members opposite, it is showing itself now, that the figures should have been fairly constant, and that the sudden rise in the figures which we are all lamenting to-day have not been caused to any great extent by rationalisation. The hon. Member who has just spoken also mentioned the possibility of discharges from employment being caused for some political reason. I cannot believe that that could be so in industry. A factory owner does not engage or discharge men at some whim of his own. If he has work for men to do he keeps them on, but if he has not the work he does not keep them. I cannot 4magine that any employer would cut off his nose to spite his face in the way suggested by the hon. Member.
I have listened to many of these Debates on unemployment. In the last Parliament I listened to Debates on an exactly similar resolution for increasing the borrowing powers of the Fund. I have noticed one singular thing. When the party opposite are in office they always ask for unemployment to be treated in a non-party spirit. That suggestion was made by the last speaker,
and by the hon. Member for Attercliffe (Mr. C. Wilson). But when hon. Members are in opposition nobody makes more violent attacks on the Government or accuses them with more ferocity of being the direct cause of unemployment. All kinds of extraordinary statements have been made.
There were two points in the right hon. Lady's speech on which I wish to comment. The first is her statement that 200,000 was what she called the normal seasonal increase. I hope that whoever winds up this Debate will make it clear whether or not the right hon. Lady regards that as a normal figure and means that we are to expect an increase of 200,000 every winter. I cannot believe that anybody will consider it satisfactory that a Minister, merely with a shrug of the shoulders, should say "This is normal and must happen year after year." I do not believe that a figure as high as that is to be regarded as the seasonal increase which is to be expected to come into operation year after year. The right hon. Lady also said that she and her friends were not going to prophesy to-day. They must have forgotten their Election speeches. There were many prophecies at the Election as to what they would do regarding unemployment if they got into office, and those prophecies have been proved false. I can quite understand that the right hon. Lady does not propose to prophesy on the present occasion.
This Financial Resolution is the prelude to the third Unemployment Insurance Measure introduced (Firing the life of this Government and only ten months have elapsed since the Government took office. From what the right hon. Lady said, I take it that we may expect a fourth Bill, probably before we adjourn for the Summer Recess. in which case we shall have the extraordinary circumstance that in one Parliamentary Session there will have been four Unemployment Insurance Measures. That is what makes us on this side wonder whether the whole basis on which the Government are acting is not wrong. Our charge against the Government is, first, that the financial proposal which we are discussing at the moment, as the basis for this coming Bill, is bad; and, secondly, that the Government's plans for dealing with unemployment, for bringing the figures
down, and for doing away with any necessity for any Resolution or Bill of this kind are also fundamentally unsound. The Resolution proposes to increase the borrowing power of the Fund by £10,000,000 and I think the basis of our attack upon that proposal can best be put by quoting one sentence from a leading article in the "Times" newspaper, dealing with the White Paper which was issued in connection with this Resolution:
This figure (£10,000,000) reflects not only the total failure of the policy of expanding relief works to make any impression on the volume of unemployment, but also the disastrous effect of passing legislation, of which the consequences have been refused consideration in the determination of the Socialist party to convert the benefits of an insurance system into organised public charity.
That one sentence states the reason why we are thoroughly dissatisfied with the present situation. I have been reading the Debate on a similar Resolution in 1928, and it is interesting to see what the views of hon. Members opposite were on that occasion when they were in Opposition. One of the most astonishing speeches was made by a Member of the present Government, the hon. Member for Finsbury (Mr. Gillett). In a long speech on the Financial Resolution he declared that borrowing was thoroughly unsound, and that the money to be raised must and should be raised by taxation. He went on to ask what would the Government—that is ourselves—say to them—that is the Labour party—if they were in office and attempted to do such a thing. The hon. Member suggested that all the representatives of big business would immediately attack them for such unsound finance. I should like to know what the hon. Gentleman thinks of the position, now that the Government of which he is a Member are doing the identical thing which he attacked with such ferocity such a short time ago.
The right hon. Lady has frankly dealt with her own statement a year ago that it was dishonest to borrow instead of getting the money by taxation. What we object to, particularly, however, is that not only are hon. Members doing this thing, which is dishonest according to the right hon. lady, and unsound according to the hon. Member for Finsbury, but at the same time they are increasing
taxation. They are trying to have it both ways. They increased taxation in the Unemployment Insurance (No. 2) Act and now they are proposing to borrow. It is not a case with them of making the best of both worlds, but of making the worst of both worlds. Hon. Members opposite may ask us why, if we object to borrowing, did we borrow ourselves. The answer is that we genuinely hoped and worked for a reduction of the unemployment figures to a point at which the Fund would balance. When we were in office we had our plans, which we had matured and which were gradually coming to fruition, and one has only to look at the record of the figures week by week to see that they were dropping. On the other hand, all that the party opposite have done and apparently all that they intend to do at present, is to send up the figures. During the Debates on the last Unemployment Insurance Measure—the big Measure—it was definitely stated that certain so-called concessions which were being made, would increase the figure on the live register.

Mr. HAYDAY: Those who had been cut off.

Captain HUDSON: If that be so, my argument is that it is unsound to borrow. It is not a question of whether it was right or wrong to put up the figures. A few mouths ago, the Lord Privy Seal said he anticipated that 100,000 more people would be on the unemployment register as a direct result of the Measure to which I have referred. If so, surely the Minister must realise that to increase the borrowing power by £10,000,000 is no solution of the problem, because if the Government are raising the number by 100,000 they will never get to the balancing figure. We had hoped that such a figure would be reached but I do not see how the Minister can, in any circumstances, hope that the balancing figure, which she estimates at about 1,200,000, can be reached after the legislation which was passed earlier in the session.
What does the Financial Resolution propose and what effect will it have? We understand from the White Paper that when the live register stands at just over 1,500,000, the outgoings of the Fund exceed the revenue by £275,000 a week. If
that figure be correct, it will take 36 weeks or nine months to swallow up the £10,000,000 which the right hon. Lady is asking us to grant her to-day. She has told us that if the figure remains at that which appears in the last return, namely, 1,621,000, this money will be exhausted by November; and, from everything that has been said by the Lord Privy Seal and other Members of the Government, I think the chances are that that figure will be even exceeded. Under those circumstances, it seems to me to be a pure waste of time merely to pass this Resolution, which in a very few months' time will prove to be no good. Complaints are made by hon. Members apposite of the difficulty of finding Parliamentary time in which to put through what they regard as necessary legislation, but do they really consider that it is economic to take Parliamentary time in order to put through four Unemployment Insurance Bills in one Session, instead of facing up to the whole situation and dealing with it in a really big way?
I have studied the last White Paper issued by the Lord Privy Seal, Command Paper 3519, and I have tried to find out from it what hopes he has of bringing down the unemployment figures. Having read that Paper, I have come to the conclusion that he hopes, by means of his schemes, to employ, roughly speaking, 272,000 men; that is, worked out in man-years. 1 ask the Committee to notice that the increase in unemployment over this time last year is 439,346, so that even when the whole of the Lord Privy Seal's schemes are in operation, we still have nearly 250,000 more unemployed than we had last year, and I cannot see how the Fund is going to balance as the right hon. Lady hopes. Personally, I do not believe in these particular schemes, because I think they do more harm than good, but I cannot pursue that line of argument on this Resolution. Taking these figures, however, I do not see how they can be brought down to such an extent as to make it worth while passing this Financial Resolution.
Again, I believe that this Resolution, and the enormous increase in unemployment which causes it, are to a very great extent the direct result of the No. 2 Act. Whatever hon. Members opposite may think, that last Act directly discouraged
and, I might almost say, disgusted industry—[Interruption]. I mean that. The people in industry said that that Act was thoroughly unsound, and that if the Government could pass a Measure costing all that money, with those conditions in it, they would pass anything else of a similar kind, and just as expensive. For that reason it did a great deal of harm and people refused to expand their industries or to put more money into industrial undertakings, and therefore it did a great deal more harm than good. Further, it put into benefit people who, except for that Act, never would have been there. In my opinion, it includes a lot of people who never ought to be there, because one has only to read the White Paper issued by the Minister herself, after the passage of that hotly debated Clause about "genuinely seeking work," to see that it says that a number of people would come on to the register who, to all intents and purposes, were really outside the employment market, and therefore it has a direct result on the figures of employment.
2 p.m.
The Minister has told us that there are 50,000 more people on the register, roughly, as a result of that Act, and I would like to, know whether an additional 50,000 is, in her opinion, likely, because the Lord Privy Seal gave the figure of 100,000. We should then have some idea of what the future unemployment figures are likely to be. I am certain that this means of borrowing, and borrowing again in a few months' time, is fundamentally unsound. During the passage of the last Bill, the Minister promised us that she would look into this question of unemployment insurance and see whether she could not devise some scheme for separating proper insurance from what is really national relief, and the hon. Member for West Nottingham (Mr. Hayday) also mentioned that fact. I gathered from him that he would like the whole of the unemployment insurance taken off a contributory basis, but what we do want—and I am certain it is the only solution of this problem—is to take right off all those people who have not contributed and who are, therefore, not really insured people, and have some completely different scheme for them.
I am certain that the Minister has to face up to that sooner or later, and if she passes this Bill and then tries to pass another Bill in three or four months' time, we shall still be no nearer a solution, but simply wasting time and the money of the country. A resolution of this kind, raising more and more money which ultimately has to come out of the taxpayers' pockets, is causing the very unemployment which it sets out to meet. When the epitaph of this Government comes to be written, it will be found to be something like this: "They raised the unemployment figures to a height unknown for nearly 10 years, and, further, they had not the courage or the confidence to deal with the crisis which they had themselves created."

Mr. KINGSLEY GRIFFITH: We could approach this Financial Resolution from one or two aspects. One would he to regard it as evidence of the lamentable growth of the problem of unemployment, and that is the aspect in which it has been treated by some hon. Members today. But I feel that it is perhaps almost unfair to put the whole burden of that responsibility on the Minister of Labour, when the responsibility must rest rather upon the Lord Privy Seal and his Department. The peculiar problem of the Minister of Labour is to face the situation as she has to meet it at present in regard to the Unemployment Insurance Fund. With regard to that, the only real criticism that has been levelled against her, as far as I can see, is that some months ago she believed, acting upon her then information, that the problem could be solved without further borrowing, and was, I should imagine everybody would agree, quite rightly anxious to do without further borrowing if she could. But now, when faced with a situation which we all deplore, she has been driven to have recourse to that very unfortunate expedient, as it is from everybody's point of view.
After all the criticisms that have come from above the Gangway on this side of the House, I am still at a loss to know exactly what they want to do, and how they want to deal with this situation. We have been told that this proposition is financially unsound. The finance is sound enough, in the sense that the money will go into somebody's pocket and will buy stuff to eat and clothes to wear. In that
sense it is sound. It is where it comes from, not where it goes to, which I presume is under criticism. There are only two ways—either it must come by borrowing, or it must come from the pockets of some other people. It is not suggested that there should be increased contributions, and in that case the only resource would be a further immediate burden in the way of direct taxation, but if those above the gangway can hardly await the Budget, and are already letting out suppressed screams of rage and agony, even before they hear what their fate is to be, I do not think they should commit themselves to a positive recommendation on those lines.
What is it, then, that they really want? It is, that not so much money should actually be spent in the relief of this problem. That is, quite obviously, at the back of their minds One has only to look at their own proceedings to see that. Would they reduce the benefits? They were extremely nervous about them when previous legislation was before us. I think the real key to the situation is to be found in the speech of the last speaker, when he said that at the end of their term of office the last Government were getting the figures down. Getting the figures down, yes, but there is a process of getting figures down which no-one on these benches would recommend. One can get figures down by seeing that people are not available for benefit by ruthless administration. By preventing people coming on to benefit and putting them on to the guardians, they are not doing anything towards solving the unemployment problem. They are not creating a single new job.
The whole tragedy of the situation is that there is a certain number of jobs available, and a larger number of people apply for them. There is a surplus. How are you to deal with it? You are not solving the problem simply by making the lot of the people a harder one by harrying them from pillar to post. You might, by your harrying principles, though I very much doubt it, induce some individuals to be more active, and get jobs possessed by other people; but it is not in any way a solution of the unemployment problem. I, myself, far prefer to see the burden borne, if it must be borne, in what is, after all, a national manner as far as it goes, rather than that it should be
thrown increasingly upon those already overburdened local authorities in the depressed areas. Although I deplore, as much as anyone above the Gangway, the necessity of borrowing further in order to pay people for idleness rather than for work, the immediate problem before the Minister of Labour appears to me to admit of only one solution, as far as I can make out, which is, roughly, the solution that is taken at the present time. We would all like to summon the heads of the Government back to the mood of greater faith and greater hope which they had when in Opposition, when one heard the Home Secretary saying quite clearly that one had to choose between paying for work and paying for idleness, and he was going to choose paying for work all the time. We want to see that done, and to see the plans which the Prime Minister said had been left in the pigeon-holes of the last Labour Government, brought forward and put into operation as soon as possible. Even so, there will be the intermediate problem to deal with, and it is that intermediate problem which is the particular task of the Minister of Labour at the present moment. Looking at her task, and not that of her colleagues, upon which, on other occasions, we may have something to say, I see no foundation for the attack levelled above the Gangway.

Mr. DENMAN: The hon. Member for West Middlesbrough (Mr. Griffith), in his admirable speech, has voiced very much what we on this side feel. In this debate the Opposition has really not explained what they mean and what they want. The first speaker reviled us for having objected to borrowing. The last speaker on the benches above the Gangway opposite objected to borrowing, but did not tell us what else we could do. Surely it is practical common sense that this borrowing is the only method at the moment, but I entirely share the view of an hon. Member on this side in objecting in principle to piling up debt against the Insurance Fund, and above all, of piling up this enormous aggregate of interest on the debt, which is a process that none of us can like. We on this side, whatever may be the case with those on the other side, would like to see it dealt with much more frankly and openly by taxation. The difference is an important economic
difference. This debt which is being piled up against the fund ultimately falls on productive industry. It becomes a cost of production. If you meet it out of taxation on profits, it has an entirely different effect upon industry. If you tax profits, you are limiting the amount available for future development. if you tax costs of production, you are impeding industry in the export markets. Of the two, we say that the former is the lesser evil. It is more important that we should be able to compete in the foreign markets with low costs of production rather than that we should have a greater fund of additional capital, which, as far as we have seen in recent years, mainly goes in promoting luxury industries. That is the case for taxation as against increasing the debt.
The real reason I rose to speak was to offer a suggestion for reducing the amount of unemployment for which we have to pay. That is really what we in this House want to deal with, and I appeal not only to the right hon. Lady, but to the Government to take one step which they and we put before the electorate, namely, to take the 14 year-olds off the labour market. After all the process is an example of the kind of horse-sense that distinguishes British politics. If the bath is too full the first thing is to turn off the tap. Similarly with an excessive amount of available labour. This course has been advocated, but the difficulty we are always up against in advocating it is that we are asked, what will be the precise effect on unemployment by removing the 14 year-olds? I am not going to prophesy, not because I am afraid of being shown to be a false prophet, but simply because there will be no possible means of showing the prophecy to be true. We shall never be able to tell what is the effect of removing the 14 year-olds from the labour market, but I do suggest for consideration that it will have a very substantial effect upon the unemployment figures. Juvenile unemployment now is over 80,000, and I think it is fairly clear that if from the 80,000 unemployed persons below the age of 18 you take away the 14 year-olds, you must produce some direct effect upon juvenile unemployment. If you take them off the labour market, though it is quite true you
cannot be sure that they will be replaced by adults, it is extremely probable that they will be replaced by 15 or 16 year-olds. Therefore, it is pretty certain that the immediate effect would be substantial, wherever juvenile unemployment is serious.
The curious feature of juvenile unemployment is the strange variety of percentages in different localities. In adult unemployment there is also variety, but it is within reasonable limits. The percentages in juvenile unemployment are fantastic. In Yorkshire, the smallest figure is 2 per cent. in Skipton. In Leeds it is 4 per cent.; in Selby it is 57 per cent,; and in my own county of Cumberland, I seen that Carlisle is about 7 per cent. Workington about 44 Per cent., and Cleator Moor 74 per cent. I agree that that does not give any real picture of the facts, but it gives a relative picture as between different districts. Clearly, where there are very high unemployment figures, and the 14-year-olds are taken off the market, you can fairly easily substitute slightly older children. Surely the Committee will be unanimous in wanting, above all things, to reduce juvenile unemployment. Unemployment at any age is bad enough, but the deepest evil of unemployment is the unemployment of juveniles. It is not only a matter of having certain human beings unemployed, but of creating a mass of unemployables, so that everything we can do to reduce juvenile unemployment is of the first importance.
There is an extraordinary argument that taking juveniles off the labour market will have an effect only in one year, and that it is not worth doing for that reason. That is an argument which I dare hardly mention in public, because it is so foolish, but it is frequently advanced. Let me give certain figures that refute it. The Ministry of Labour had a committee to consider what would be the effect of raising the school age upon the employment market, and they prepared figures of employable juveniles. I will give the figures for the years immediately ahead. The estimated number of juveniles likely to be employed or available for employment in 1931 is 365,000; in 1932, 319,000; in 1933, 324,000. Then they come to the end of the depression, and the number in 1934 is 481,000, and then it gradually falls off, If these are taken off the labour market
year by year, it will mean less unemployment. I do not suppose that the right hon. Lady will object to a single argument which I have yet advanced, I ask her to agree with me in my concluding argument, which is this: Under the present programme of the Government, it is fairly clear that these 14-year-olds will not be coming off the market in the programme time of April, 1931. It will only be if the Government this Session actively pursue the policy of taking these juveniles off the labour market, that they will be able to show to the country that they have done something effective on the lines indicated.

Major MUIRHEAD: The last speaker has directed his attention, and I think rightly, to examining one of the causes on account of which unemployment insurance money is paid. I shall direct my attention to another cause in rather a different direction. The hon. Member for Leith (Mr. E. Brown), in replying to the speech of the hon. Member for Cirencester (Mr. W. S. Morrison), said that the amount of unemployment that existed in Cirencester was not sufficiently high to justify the hon. Member in making certain remarks on the unemployment question. That is a point I rather want to take up. When we discuss the question of unemployment, we nearly always have our minds on industrial unemployment. I think that that is due to the fact that industrial unemployment is very easily comprehensible. It is visible in the groups of men standing at the street corners, and in the returns which we get of the unemployed who are insured.
We hear very little about the question of agricultural unemployment. The spectre of agricultural unemployment has, I believe, in the eastern counties become something more than a spectre and has become a reality, but taking it throughout the country there is still a large complaint that the difficulty is to get sufficiently skilled agricultural labourers. I believe that if we take it all over the country, one district with another and get out the figures of agricultural unemployment, we shall not get any very startling result, but it does not follow that the question of agricultural unemployment has no effect on the unemployment question at large. We cannot measure that effect by the
amount of agricultural unemployment. It is in the ranks of agricultural employment that we can measure it, but it is in the ranks of industrial unemployment that it is felt.
Let me explain what I mean. Between 1921 and 1929, employment in agriculture went down in England and Wales by roughly 100,000; in the whole of the United Kingdom it was 110,000. No one can suggest that the number of agriculturally unemployed people increased by 100,000. Where did this 100,000 go to? They went into the industrial world—at all events, they went into the non-agricultural world. I say that they went into the industrial world, and not into industrial employment, because unfortunately the industrial world is made up of both employment and unemployment. It is quite true that a certain number of this 100,000, either actual agricultural workers or potential agricultural workers have been permanently absorbed in that increase of employment which has taken place in the course of the last five or six years, but that should not obscure the effect which the influx of 100,000 additional people must have on a section of the labour market, which for the last ten years has been unable to absorb its personnel to the extent of well over 1,000,000. That is what I mean by saying that the number of agriculturally unemployed can never be the test.
I believe that you might reduce the number of agriculturally employed people by another 100,000 without really very much altering the number of agriculturally unemployed throughout the country. That is due, I think, to this reason. We have talked for many years about what is known as the drift from the country to the town. I prefer not to use that phrase now. It is not exactly a drift from the country to the town, but rather a dovetailing of the country and the town, which makes the problem of the town and the country far more mutual than it ever used to be. It is possible for a man to change from an agricultural to an industrial employment without changing his place of residence. That is to say, that the drift or the dovetailing does not, as it used to do in the old days, in any way necessitate a visible geographical movement of a man from one place of residence to another.
That is due to two reasons. First of all, the great increase in the facilities offered by modern transport enable the employés of a particular business to be drawn from a far wider area than before; and another important reason is the increasing movement of industry into the South of England during the past few years, this being a part of England which hitherto we have been accustomed to think of as predominantly agricultural. In the annual report of the Inspector of Factories for 1928 there is a significant passage:
The flourishing trades being well represented in the South of England, that part of the country naturally furnishes more cheerful reports than the North, not only as regards employment in existing works, but as regards a considerable expansion of plant and machinery in order to keep abreast of the demands. The growth of industry during recent years in the South of England has been remarkable.
The report then goes on:
Some indication of the industrial expansion in the southern counties is given by the progress of the Southern Counties Factories Department. During the last eight years the number of registered factories has increased by over 3,000, and some of the works are of great size. Between Acton and Slough it is estimated that there are now 150,000 factory workers compared with only 60,000 five years ago.
From the point of view of the South, that extract in itself is, of course, very cheerful reading, but one has to remember that a large number of the people who are employed in those factories in the South either have been agricultural workers or what I would like to call potential agricultural workers. It is they who have gone into those works, instead of unemployed people from other parts of industrial England.
I must come back to that point of the potential agricultural worker. There are a large number of people going into industry nowadays who have never been employed in agriculture but who normally would have gone into agriculture, and that is what I mean by the term potential agricultural worker. When an agricultural worker, or a potential agricultural worker, goes into industrial employment, it has a dual effect from the point of view of the industrial worker. First of all, he definitely displaces an industrial worker.
The second effect is this. A considerable portion of the home market for our industrially-manufactured goods is to be found in the agricultural districts of England, being furnished not only by the actual agricultural workers themselves but by all that life which centres around agriculture as an employment. The moment a man leaves an agricultural district and goes into a town, the agricultural market for English manufactured goods is reduced by one. If I may use a phrase to which we are accustomed in Parliament, when a man goes from agriculture into industry he counts two on a division; he displaces a man, and at the same time he reduces the market. That is all I wanted to do, to draw attention to the interdependence of agriculture and industry in our modern life to-day, with special reference to the unemployment question; and I wanted to draw attention to it because it is a fact which is all too little understood, particularly by the vast millions in our urban centres.

Mr. DICKSON: One of the outstanding features of every unemployment Debate which has always struck me is the effrontry with which certain hon. Members opposite discuss the unemployment problem and the needs of the unemployed. The unemployed in this country divide themselves into two sections. One section is composed,, with the exception of a number of very young people, of men who are desirous of labour, and who for one reason or another are denied the opportunity to labour, and the other section are those who never did labour and hope they never will labour. Curiously enough, the chief criticism of any attempt to assist those who are unemployed through no fault of their own comes from those who, so far as one can judge, were never very anxious to start work at all. [HON. MEMBERS: "Who are they?"] Consult some of your colleagues.

Dr. DAVIES: Consult some of those on your Front Bench.

Mr. DICKSON: We have been told several times to-day that all these charges are burdens upon industry. I think we all agree that additional charges in respect of unemployed people are a charge upon industry, but the people who never started to work at all are also a charge upon industry—

Mr. MACQUISTEN: At their own charge.

Mr. DICKSON: —and per unit they are a heavier and a more permanent charge upon industry than those in whose interests this Motion has been submitted. While we speak of the unemployed being a burden upon industry, I hope that in justice to them we will recollect that modern methods of industry impose a very heavy burden upon the unemployed. It was said earlier, by an hon. Member opposite, that every Member must have viewed with profound regret the submission of this Motion. He did not speak for me. I do not view it with profound regret. I do not view with profound regret the arrival of the ambulance when an accident happens. I may view the accident with profound regret, but not the arival of the ambulance. Up to now, the ambulance service has not been sufficiently adequate, and it may be, as has been suggested, that the Motion now submitted will not meet the demands of the situation for any long time.
Several attempts have been made to saddle upon those who sit on this side of the House the responsibility for this condition of affairs, and phrases about a world glut of commodities, financial crashes here, there and everywhere, and general depression, have been lightly thrown about. Those things can aggravate the problem of unemployment, but they do not cause it, and the removal of those things will not remove the cause of unemployment. It is time hon. Members got more firmly into their minds that we have a condition of affairs to-day arising out of the inevitable evolution of industry run under conditions in which we on this side do not believe but in which hon. Members opposite do believe.
Hon. Members opposite must reconcile themselves to one of two things. They must either admit that under the present system we are increasing unemployment and that that system is wrong and must be changed, or else if they say it is right they must accept the consequences of the system in which they believe, and pay without grumbling the social charges of that particular section of society. The vote for which the right hon. Lady asks is merely a financial reflex of a piece of
very elementary human justice which is being done by this House to the unemployed.
Hon. Members opposite seem to have forgotten the passing some time ago of the Measure which made these benefits smaller. It is said that our policy has increased the number of the unemployed, but it would be more correct to say that we have merely reduced the number of unemployed who were not getting decent maintenance under the Insurance Act. Before the present Government amended the Insurance Act, there were large numbers of unemployed who were denied the right of receiving benefit under the insurance scheme, and I hope those who are now sitting on the Front Ministerial Bench will not be deterred from carrying out the proposals which they have made. As to whether those recommendations should be carried out by taxation or some other means I cannot say, but I sincerely hope that in the course of the next few weeks the Chancellor of the Exchequer will find some means of removing all possible grievances in that direction.

Mr. MACQUISTEN: It may be true, as has been stated by the hon. Member for Lanark (Mr. Dickson), that there are some Members on this side of the House who have never yet started work, but at all events they are living on what belongs to them. I am one of those who have always resented the use of the word "dole." A proper insurance scheme is in exactly the same position as the payment of pensions to school teachers, policemen and retired army and navy officers. When you come to what is called uncovenanted benefit, you arrive at a different position altogether, and a different administration, and it is very unfortunate that Governments of all shades of opinion have mixed up the two things. I have been in the House since the year 1918 with short intervals. I was in the House when unemployment benefit was first mooted three months before the Armistice, and I remember that some trade unionists protested against it, and said that the working-classes did not want it.
At one time in my constituency, we had a prosperous ship-building yard which employed a large body of men, and it did very well. We also had what no
doubt the hon. Member for Dundee (Mr. Scrymgeour) and the Chancellor of the Exchequer would deplore and regard with horror, that is no less than 18 distilleries, but they are all dismantled now and shut down, and in that district at the present time no less than 50 per cent. of the men are unemployed. I have met many of those men, and I am in a position to repudiate on their behalf that there is anything more than an infinitesimal percentage of them who do not want employment, except in a very few cases of physical ailment. I hope that all working men will before long get a week's holiday with pay. After about a week, I should say, a different view supervenes. I recollect that, in the 1923 Election, Conservative candidates were asked the question, what was a fair wage for a working man. That is something like asking what is the proper length for a bit of string. That question was put to me. It would take too long now to give my answer. [Interruption.] Then I was asked, what was the proper wage for a man who was not working, and I said, with perfect truth, that he ought to have at least double the money of the man who is working, because he has so much time on his hands that he needs money to spend in order to keep his life from growing monotonous. [Interruption.] That sounds very amusing, and hon. Members may think it is a joke, but it is not.
It may be that there are certain circumstances which definitely invite a man not to take employment. If you pay a man more to do nothing than he can possibly earn by doing something, he would be more than human if he did not yield to the temptation. An hon. Member opposite mentioned the case of a man who had a wife and seven children. If my reading of the Unemployment Insurance Act is right, if that man were engaged in manual labour or in some poorly paid employment, he would inevitably receive more if he were unemployed than if he were employed, because there is no question of a children's allowance when a man is in employment. Therefore, if he can get more money for the purpose of sustaining his wife and family by being unemployed than by being employed, I maintain that, in the interests of his own household, it would be his duty to be unemployed. I remember seeing it stated in some magazine that
one hon. Member on the opposite benches has a family of nearly a score, and, if that be so, and if he were an ordinary wage-earner, I say it would be almost his duty to do nothing but attend and draw his unemployment pay. [Interruption.]
I have heard it stated that the Opposition have suggested no alternative to this policy. We did do something ourselves, but the problem is a difficult one, as you are bound to go on more or less from hand to mouth. The question is, could we not devote ourselves, in all parties, to some scheme for a solution of the difficulty? I do not know why it is that we cannot realise that it would be infinitely better to provide work than unemployment benefit. I do not, of course, believe that any legislative assembly, or, at any rate, a large body like this, is capable directly of providing work in any shape or form. After all, the vast majority of the Members of this House—and it is the case very much on both sides—have no acquaintance with business or manufacturing or industry—[Interruption]. My hon. Friend the Member for Central Southwark (Mr. Day) says that he manufactures amusement for the people, but that is not the point. The Government may do great harm to certain industries. The measures which they are taking in connection with the coal trade are definitely directed to preventing the unemployment of a certain number of people—[Interruption.] I think that that is germane to the present discussion, because it is a question of unemployment, and the question of unemployment is what we are discussing now.
The real difficulty is to get more employment. I must say that I believe the Lord Privy Seal has prevented a great number of men from being thrown out of employment. I know of a number of instances in which his personal action has prevented hundreds of men from becoming unemployed, and has prevented works from being shut down. I wish him to have all credit, both in this House and in the country, for preventing things, bad as they are, from becoming worse; but I do say that the Government have a certain amount of responsibility for the general difficulty that there is in developing industry. The shyest bird in the world is credit and capital. It is not like labour, which it is almost impossible to
move. You cannot take people away from the districts where they have been brought up and where their friends and families are. This movement for the transfer of labour is only "a fleabite in the ocean." [Laughter]. I am surprised at the want of Parliamentary historical knowledge on the part of a large number of Members of this House. For that saying I am indebted to the father of the late Chancellor of the Exchequer. It is not an original saying of mine at all, and I do not want to take full credit for it.
Capital is an entirely different proposition. It can take the wings of the morning and fly to the uttermost parts of the earth. During the time of wild speculation on the New York Stock Exchange some months ago, I was talking to a man of large capital, and he told me of vast sums that he transmitted backwards and forwards in order to assist the Americans. Then, shortly before the crash came—a crash which, I may say, was assisted by Mr. Hatry—he brought his money back. That is what happens with capital. If you get a Government that frightens capital, away it goes. When labour goes on strike, bands are played, great noises are made, and there are denunciatory speeches, processions, picketing, and all sorts of other things; but, when capital goes on strike, you never hear a whisper; it goes like an owl in the night. [Interruption].
A Conservative Government can embark on a great deal of Socialistic legislation, and I must say, with all respect, that the last Conservative Government did many things with which I myself did not agree, but, being a very unimportant member of the party, my advice was always disregarded. If, however, that is done without disturbing the sense of security, you get development, and people embark in new enterprises, because they realise that under a Conservative policy they are not going to be injured by any vindictiveness, or by any adverse effects that can be avoided; but when you get from hon. Members on the other side of the House what I might almost call displays of temper and indignation whenever the question of anyone making profits is mentioned, till you would think that bankruptcy was almost a merit in the eyes of the Labour party. then, of course, you get capital slipping away, and there is no enterprise.

The DEPUTY - CHAIRMAN (Mr. Dunnico): The hon. and learned Member is now getting altogether too far away from the Resolution.

Mr. MACQUISTEN: I was thinking of the effect of the flight of capital, and the flight of capital is one of the main causes of unemployment. It is brought about, not so much by what those on the Front Bench opposite do, as what they say for the purpose of deluding the electors into the belief that they have some Fortunatus purse which will give them all an easy time of it. The right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) struck a wrong note after the War. If he had told the people that the next worst thing to losing a war was winning it, and that the country was in for a very hard time, I believe we would have been infinitely better off. Cannot we take an example from those who reside in the Antipodes? It is not they, but we who are upside down. I suggested to one of their Ministers the other day that I wished very much that they would take over our present Government and educate them, and send theirs across here, because I believe they could do a lot with their Antipodean experience to solve the problem of unemployment.

Mr. SANDERS: The House must feel very grateful to the hon. Member for the way in which, with his sense of humour, he has brightened the dark shadows of this problem. I rise to speak on two points only. I make no apology for having interrupted the speech of the first speaker on the other side. We may be a little sensitive on this side with regard to references to the unemployed, because a large proportion of us have known what it is to be unemployed, myself among the number, and, when I think of what I and some of my friends have gone through, we do not like to be twitted that we belong to a set of people who are chiefly interested in getting doles out of this Government.
3 p.m.
The first speaker said that there was no argument really in the fact that there is at present in the international wholesale market a fall in the price of raw materials, and that it is a falling market, to support the idea that unemployment is caused thereby. We contend, and I think all economists back us up, that,
while the market is falling, people will not buy, because they hope that it will fall still further. That is the whole history of the dangers of a falling market, and a good deal of the unemployment existing not only here but in America and in Germany is due to the fact that our buyers do not know how far the fall is going. While I agree with my colleagues who press upon the Government the desire that they should push forward with the raising of the age at which children should enter industry, I want to add one word for another Measure. I hope the Government will press forward with the greatest possible expedition their Bill for clearing slum areas.

The DEPUTY-CHAIRMAN: I am afraid we cannot discuss slum clearance. The Money Resolution will not admit of that.

Mr. SANDERS: I am doing no more than the hon. Member on the Front Bench below the Gangway when he pressed for the raising of the school age.

The DEPUTY-CHAIRMAN: The hon. Member in raising that question dealt definitely with juvenile unemployment and how it could be reduced.

Mr. SANDERS: I only wanted to say that, if the Slum Clearance Bill were got through rapidly, a large amount of employment would be created in an industry where at present the unemployment figures are very high. I believe these two measures, the one advocated by the hon. Member and the other by myself, would make a great hole in the disastrous total of unemployment that we all heartily and sincerely deplore.

Mr. CHURCHILL: The Debate has been characterised by good temper and composure, and certainly the speech that has just been made has in no way departed from the general character of the discussion. I have, in speaking towards the end of the Debate, to endeavour, as far as I can, to focus the attention of the Committee upon the essential and well-known aspect of the problem which is before us on this Financial Resolution.
The problem divides itself into two parts. There is the financial and there is the social aspect. I come to the financial aspect first, because, though it
is important, it is in my opinion the less important aspect. I hope the Committee will allow me to review, briefly, the history of the Insurance Fund. This fund, when the late Government took office in 1924, possessed an income from workpeople, employers, and the Exchequer amounting to nearly £50,000,000 a year. It also possessed, as the Committee know well, borrowing powers up to £30,000,000. These borrowing powers had been used to the extent of £17,000,000 in 1922, and by the time we came into office that total had been greatly reduced and the income of the Fund was sufficient to provide for 1,200,000 persons continuously on unemployment benefit without increasing the indebtedness, and any saving went to the reduction of the charge.
During the first 18 months of our tenure unemployment fell steadily, and in 1925 the debt had fallen to £8,000,000, and for the first time, the only time for a great many years, the figure of unemployment had definitely fallen below the total of 1,000,000. Under these circumstances, we considered ourselves justified in reducing the contributions of the employers and of the work-people, as well as the contributions from the Exchequer, and we did this under the Unemployment Act of 1925 and the Economy Act of 1926. The effect of these two Measures was to diminish the income from the Fund by, I have calculated, £8,000,000 a year, whereas the Chancellor, who may well be right, very often states it at £10,000,000 a year.
We believed these reliefs to be justified by the improvement of trade and employment, and even after these reliefs were granted the Insurance Fund was capable of reducing the indebtedness whenever the figure of unemployment was below 1,000,000. It was then that the party opposite struck its first great blow at employment and at the Unemployment Insurance Fund. It was when these grievous industrial problems associated with the coal trade and commencing with the General Strike came upon us. The tax upon the Fund cannot be better described than in the measured language of the Blanesburgh Report, of which the Minister of Labour is a signatory, when it was stated:
With steadily improving trade, the income of the fund was increasing and its expenditure going down. The general strike
and the stoppage in the coal-mining industry have changed that situation. The resulting unemployment, as we have seen, increased the indebtedness of the fund from £7,100,000 in April last to over £21,000,000 in December, and there is no prospect that this heavy debt can be liquidated by the time when the new scheme should come into force.
That quotation is well known, and are we not entitled to take that as a milestone in this discussion and as a convenient starting point? What ought we to have done on the morrow of these great disasters? We had to survey the whole financial situation, and, in particular, the finance of the Insurance Fund. It was my endeavour, as far as humanly possible, to avoid imposing further disheartening taxation upon the general taxpayer or upon industry at a time when both were painfully recovering from the deep injuries from which they had suffered. I therefore did not increase the contributions of the workpeople or the employers, nor did I restore the Exchequer contribution. I considered, and I still hold the view, that a Fund with an independent income of over £50,000,000 is not compromised or imprudently administered if, during a period of wholly exceptional unemployment, its borrowing powers are used to the full statutory limit, or even to some extent beyond the original statutory limit. Broadly speaking, I have long been of the opinion that the position of this Fund would not be unsatisfactory if its borrowing powers were extended to a figure equal to, say, at least one year of its annual income.

Mr. WALLHEAD: Was the income of the Fund £50,000,000 after the reduction?

Mr. CHURCHILL: No, it was reduced by £8,000,000 to £42,000,000. Broadly speaking, I have said that a Fund of this kind is not in an unsatisfactory condition if, with an income of £40,000,000 or £50,000,000 a year, it increases its borrowing powers up to the amount of its annual income. That is the view which I have always held. I could not see that any great advantage would he achieved by transferring a large portion of burden from this Fund, with its own independent income, to the National Exchequer, when the National Exchequer had a debt which was eight or nine times its annual income, whereas the Fund had only a debt of less than one year of its annual income. Moreover, I felt that the general strike
and the coal stoppage bad arisen solely in the industrial sphere and that it would not be desirable or even just, if it could be avoided, to penalise more than they were already penalised the great mass of the nation, including the agriculturists, the shopkeepers and the other unclassified elements in the nation, who, whatever may or may not be said upon the subject of responsibility, clearly had no responsibility for the quarrel which had caused them so much harm.
Fair play and sound finance both seemed on the side of allowing the Insurance Fund to bear its own burden, and there was no evidence to show that, over a long period of time, it would not be capable of bearing its burden. When, in 1928, the partial rationalisation, which had been enforced upon the coalfields, began and threw heavy additional unemployment upon the Fund, while the employment in other branches of industry was not unsatisfactory, but was improving, we considered that we were in the presence of another passing emergency and we, therefore, increased the borrowing powers of the Fund to £40,000,000 for one year only. I repeat that I believed that this was preferable to adding to the burdens of the taxpayers by an increased Exchequer contribution or by restoring the additional pennies to the contributions of the workpeople and the employers.
That was the situation when the Government changed. The new Ministers arrived and took up their duties. In the autumn of last year, 1929, the Chancellor of the Exchequer surveyed the whole of this policy with a very censorious eye. He declared that the Insurance Fund was running into bankruptcy and that that was entirely due to the reliefs that we had granted in the winters of 1925–26 to the employers, the workpeople and the taxpayers. He described these reliefs as being a raid upon the Fund, and used expressions which have been animadverted upon lightly and amusingly by my hon. Friend the Member for Cirencester (Mr. W. S. Morrison). He spoke as if we had robbed the Unemployment Fund of money which was the property of the unemployed. The absurdity of this statement is, of course, obvious. The Fund was not bankrupt. It was in a far
better position than the National Exchequer, from every point of view. The cause of the trouble which had arisen in the Fund was not due to the legislation of 1925 and 1926, but to the subsequent great industrial disaster. Remissions of burdens to workpeople, employers and taxpayers ought never to be described by any responsible person in terms of unmeasured opprobrium.
However, the Chancellor of the Exchequer was master of the situation. He immediately invoked the highest canons of finance; he declared his determination. The income of tale Fund exceeded its outgoings, not merely over a number of normal years but, even at exceptional periods of stringency and depression, but he and his colleague the Minister of Labour brushed aside altogether the idea of increasing the borrowing powers of the Fund. The Chancellor of the Exchequer, with an air of extreme virtue, increased the Government's subventions to the Fund to the extent of £14,000,000 and invented the legend that he was in no way responsible for this addition to the burden of the taxpayer, and that it was solely due to paying off the debts which we, and in particular I, had incurred. When I had occasion to discuss these matters with the Chancellor of the Exchequer across the Table of the House I pointed out that he had made his own task needlessly difficult, that he would run the present Budget into deficiency by this extraordinary expenditure apart and that he greatly increased the menace to next year's Budget, with all its depressing reactions upon trade and employment.
The Chancellor of the Exchequer wrapped himself in his virtue and treated these arguments with scorn. They might be good enough for a Conservative Government but, for him, no increase in the. borrowing powers of the Unemployment Insurance Fund could be tolerated. Why then do we see him this afternoon, less than six months later, proposing to us the very course which he condemned, and proposing to increase the borrowing powers of the Fund to £50,000,000 instead of the £30,000,000 to which they were to drop. On what grounds of logic, of principle or of reason, can the right
hon. Gentleman justify the course which he now invites us to take? The income of the Fund is during the present emergency clearly insufficient to meet its outgoings. It is running into debt by nearly £1,250,000 per month or more. Unfortunately, this insolvency and bankruptcy upon which the Chancellor of the Exchequer animadverted so seriously in the autumn are present again in an aggravated form.
The strictures which might be made upon the present position are his own strictures and the strictures of his colleagues. According to his principle so frequently proclaimed, and the other arguments he has hitherto used, it is his duty to increase the Exchequer contribution until the Fund is placed in a currently solvent condition. He has decided not to do that. He has decided to borrow; and to borrow for the very purpose that six months ago he so strenuously denounced. If the Chancellor of the Exchequer was right then he is, on his own showing, wrong now; and if he is wrong now what becomes of the argument that the £14,000,000 additional taxation which has been placed upon the taxpayer was rendered inevitable by the condition of the Unemployment Insurance Fund and that he was merely repairing Conservative neglect? The legend which he has been sedulously promulgating in order to prepare for his budgetary excursions is now shown to be stripped even of the faintest foundation of fact.
But what about the Minister of Labour? The right hon. Lady used even stronger language than the Chancellor of the Exchequer. She described increasing the borrowing powers of the Fund as "dishonest." With much candour and praiseworthy courage she read out the offending quotation from her own speech in order to save other speakers the duty. Therefore I am in no need of having to repeat it for her. "Dishonest." is an unpleasant word, and it is her own word. With extraordinary naiveté she told us to-day that she still adhered to what she said upon this subject, still adhered to the language which she used in the quotation that she read, and still adhered to the word "dishonest"; and then she added a new expression of her own—that she had embarked upon a rake's progress, a "dishonest" course and a "rake's progress." And she gave the assurance that
we were quite ready to accept upon her authority, that she embarked upon this. course only with great reluctance.
I must say that I do not judge her harshly, as she judges herself. I do not think at any rate that it is dishonest to borrow up to the limits of a year's income for the maintenance of the Unemployment Insurance Fund. Certainly it seems to me that it is a financial matter about which two opinions may well exist, but into which no dishonesty enters and certainly nothing as worthy of that unpleasant word as to profess high principles in order to disparage opponents and then to desert them ignominiously the first moment that they become inconvenient. I deprecated the addition to the taxpayers' burden imposed by the Chancellor of the Exchequer last year. It is now seen that that addition was not rendered necessary by the state of the Fund; it was rendered necessary only by the desire of the Chancellor of the Exchequer to plume himself on his superior financial virtue and to thank God that he was not as other men are, which decisions and plumings and boastings have now already completely broken down. Why have they broken down? Let us see why.
That brings me to the second part of this argument. 1,600,000 unemployed—a terrible and alarming figure, a figure rightly causing distress and anxiety in all parts of the Committee, a figure which should cause a double measure of self-reproach and heart-searching in those who less than a year ago confidently asserted that they had in their possession knowledge which would enable them to cure, or at any rate to mitigate, the evil of unemployment. Now, at the end of ten months of power, during which they have not been hampered in regard to any suggestion of a constructive character that they have been able to put forward, they find that they have increased by half as much again the total —to us a matter of grave concern—of unemployment. [Laughter.] Surely, it is not a matter to laugh at. I certainly feel great relief from time to time that we have not to bear the burden that is imposed upon Ministers of the Crown, but that burden is redoubled by their own action and their own promises and asser-
tions, and by the harsh and unpitying intolerance with which they judge the loyal efforts of others.
I do not charge the Government with responsibility for the great wave of depression which has swept across the world, for the after consequences of the bursting of the Wall Street bubble, for the strange mysterious conditions of over-production in so many primary commodities. No doubt the right hon. Gentleman if he had been sitting here, would not have hesitated to try to throw the whole blame upon us. In so doing, be would only have been carrying out his invariable practice during the four or five years in which he conducted the financial business of the Opposition. I shall not imitate that bad example. I know well that the economic forces of the modern world transcend, at the present time, the power of individuals or of individual Governments to foresee or control. I would no more throw the whole blame for the wave of depression which has come across the world, and the increase of unemployment, upon the right hon. Gentleman and his colleagues, than I would give them credit for a fall in the Bank Rate, which arises from concomitant circumstances and causes.
No, Sir, we must proceed with discrimination, and the charge which I am going to make this afternoon is very much more definite and precise. I affirm that, by a wholesale and scandalous relaxation in the conditions of unemployment benefit, the Government have demoralised the whole system of unemployment insurance, and have vitiated to a frightful and almost irreparable extent, the finance and not only the finance, but what is still more important, the character of the insurance system. What have they done? I have said what was their first great blow at employment and at unemployment insurance. Here is their second blow. On the one hand, they have raised benefits at a most inopportune moment and, on the other, they have swept away many of the most important checks and tests which safeguarded the Fund from abuse. The officials of the Employment Exchanges, the humble defenders of the public interest and of the Exchequer interest, have been deprived of their proper measure of sup-
port by Ministers and, in consequence of the Debates in this House, and the tone and temper of the dominant party in this House, they have very largely abandoned their painful task of testing applicants and holding firmly the reins of administration. Conditions have been made impossible for them, and anyone who has followed these Debates can see how impossible it is under present conditions for the ordinary official of an Employment Exchange to discharge his duties effectively, not only to the unemployed, but in the interest of the public whose guardian he is.
I would remind the Committee of the law which we have passed. Anyone who has acquired or who may acquire a 30 weeks' qualification, which would cost 17s. 6d., can, under this new Measure, when it comes into operation, draw benefit of from 18s. to 25s. or 30s. a week, according to the family, and car go on drawing that benefit indefinitely. He need never seek work again. He need never prove that he has sought work again. He cannot be asked to prove that he is genuinely seeking employment. In the never-to-be-forgotten words of the Attorney-General, he can sit and smoke his pipe until an offer of employment is actually brought to him, and although the offer may be brought to him, and although directions may be given to him by the officials of the Employment Exchange to repair to this or that place, where he will find a job, he cannot be invited to prove that he has obeyed those directions at any time, and the officials are strictly forbidden either to strike him off or to call upon him to prove that he has endeavoured to carry out the directions which they have given to him. [Interruption.] Above all, since the Socialist Government, with the dominating party in this House proclaiming their desire to increase the benefits and further to relax the restrictions; with Ministers who, whatever they may think or feel themselves, know that their own position requires them to shake a warning finger at any official of an Employment Exchange who is found too zealous in the administration of his duties—one of my statements was challenged, but I have now got the quotation, and it is taker from the Unemployment Insurance (No. 2) Bill Financial Memorandum:
It should be noted that when directions have been given, no disqualification can follow unless it is proved that the directions have not been carried out. The claimant cannot be required to prove that he has carried them out.

HON. MEMBERS: Hear, hear!

Mr. CHURCHILL: There is nothing Like being agreed upon the facts. Such agreement is a, preliminary step to a clarification of the whole problem. The onus is thrown on the officials to prove a negative, and in the face of the mood and temper which sit upon those benches, of course the officials are throwing up the sponge generally. [Interruption.]

Miss BONDFIELD: I cannot allow that statement to pass unchallenged. I must defend the officials from a statement of that kind. It is absolutely untrue.

HON. MEMBERS: Withdraw!

Mr. CHURCHILL: I should never think of withdrawing such a statement. I have said what I believe to be true, and I remain utterly unmoved by the contradiction which I have received. [Interruption.] I have a further observation to make, and I am anxious to give the Chancellor of the Exchequer the very brief time which he asked, and which I shall certainly leave to him, but I hope I shall not be interrupted because what I say may not be popular on the benches opposite. If I am interrupted, I shall have to take longer. The Government may say and probably will say, "This new Act has only just begun to operate, and, therefore, how can it have affected the figures?" It is exactly the Act which would cast its shadow before. The moment the officials of the Employment Exchanges saw the kind of memoranda which the Ministry were issuing and the terms under which they would be governed, naturally they endeavoured to conform to what they believed was the wish and spirit of the authorities under whom they served.
The Minister of Labour showed herself extremely anxious this morning to prove how limited was the effect of the "not genuinely seeking work" condition. She spoke of the two months list, and the dead list, and the queue list, and so forth. The matter is not limited at all to these precise figures. The injury done to the economy and efficiency of the Fund is not to be described in any of these
references to particular lists. It is the whole spirit of administration which has been undermined. Hon. Members are angry with me and with my hon. Friend here who said something about reflecting. upon the bona fides of the unemployed. While I claim full liberty of debate, I am not anxious to use unnecessarily wounding language. I will use only the language that was used by the Minister of Labour herself in her own official publication. This is what the Minister of Labour became responsible for in the Memorandum to the Unemployment Insurance (No. 2) Bill on the morrow when she was smarting after having her judgment overruled by her own followers, and her hand and that of the Attorney-General forced by the Benches behind her. In their anger, the following remarkable statement was issued with the full official authority of the Minister. The publication of the document is on the responsible authority of the Minister.

Miss BONDFIELD: Whatever the feelings of the Minister may be, they have not been communicated to the actuary.

Mr. CHURCHILL: But so sweeping and so merciless a condemnation applied to those who had forced this surrender upon the Minister is attributable—I consider reasonably attributable—to a —rise of temperature, which had the advantage a securing for us a most valuable insight into the true facts of this matter, which otherwise we might never have obtained. This is what this Memorandum says. After stating that it seemed reasonable-that the further number becoming eligible for benefit might be from 80,000. to 90,000, and the annual cost of that, would be from £4,000,000 to £4,500,000, it goes on to say:
Any such estimate must, however, be given with all reserve. These figures relate to insured persons whose unemployment books are lodged at the employment exchanges. The possibility should, however, not be overlooked that the new provision may have the effect of bringing certain other persons into benefit, for example, married women who have done little or no work since marriage, and seasonal workers during the 'off-season.' These two classes of cases will serve as illustrations of what in the aggregate may amount to a considerable group of new claimants consisting of persons who, so to speak, are not really in the market as competitors for employment, but may hold themselves out as such if they are thereby enabled to qualify for benefit.
An avalanche of new claims is pouring in. The numbers mount continually; the expenses rise by leaps and bounds; heavy further increases, the Minister knows too well, are in prospect, and those increases do not correspond to any proportionate increase in the severity of the depression or the increase of distress. They are coming upon us simply owing to the relaxation of official safeguards which the Government wish to insist upon, but in regard to which they are forcibly overawed. It is only the beginning. The Government have now advertised far and wide for claims for increased uncovenanted doles—for an uncovenanted benefit is a dole of indefinite duration. They have opened the door, no doubt, to much genuine distress, but distress which, I hold, belongs properly to a reformed Poor Law. They have also opened the door to an almost limitless exploitation of the unemployment benefit, and I am justified in saying that by the words I have quoted to the Committee.
The eyes of the country are rivetted morbidly upon these figures week after week, and the whole character and record of the Government is being discredited by them. Against their better judgment they have thrown down safeguards, and consequently they have let loose upon themselves a monstrous embarrassment, which will follow them and harry them at every step, however long their pilgrimage may be. Even worse than the financial damage, is the injury to the unemployment insurance system itself. Other Governments have not been blameless. I admit fully that all the anomalies and iniquities of the present insurance system are not to be charged to the Ministers opposite, but it was hoped that a Labour Government, based as it was upon the founts of the trade union experience which was at its disposal, would have shown itself capable of recasting this problem of unemployment insurance in a statesmanlike manner, removing insurance from the atmosphere of public assistance and placing the Fund upon a sound basis. Instead they have hopelessly confounded the scientific thrift which has been organised among our people against ordinary indigence and misfortune. They have aggravated every anomaly.
Well is it known how some trades pay three or four times as much as they draw, and how others draw three or four times as much as they pay. A man who pays his contributions continuously gets no more benefit in the hour of need than the one who has paid only 17s. 6d. for the 30 weeks. This is not because of accidents between individuals at different times, but it characterises whole classes over long periods. Well do we know how the systematic decasualisation of labour has been practically arrested in many industries owing to the attitude of employers. All these anomalies existed, and they are not to be burdened upon the Government, but they, by their final Act, have aggravated every anomaly, and have justified in the cruellest manner the prejudice and world-wide contempt which has been expressed for the dole.
They have stripped our incomparable insurance system of every vestige of dignity or equity and have converted it into a vast dole-spreading agency. This disaster to the social institutions of the people far outweighs even the financial misfortune which it has entailed. In a few days the Chancellor of the Exchequer will be laying his heavy and not unwilling hands on the taxpayers of the country. He will demand further sacrifices from millions of hard-working men and women, upon whose ceaseless enterprise and effort the progress and wealth of every modern State depends, and without whose loyalty the immense revenues of the State could not be collected. They will know that a substantial and a traceable part of the new exactions to he demanded of them is due to the melancholy demoralisation of unemployment insurance, and the quartering upon them of an ever larger number of persons who need not even show that they are genuinely seeking work.

The CHANCELLOR of the EXCHEQUER (Mr. Philip Snowden): I am obliged to the right hon. Gentleman for having left me a few minutes, and those few minutes will be more than sufficient for me to reply to the speech which he has just made. There is one part of the speech, a part which occupied a considerable proportion of his time, to which I must make one word of reference, and that is the disgraceful and wholly urn-founded attack that he made upon the officials of the Employment Exchanges. It
is scandalous that a man who has been for so many years a Minister of the Crown should have departed from the invariable custom which decrees that the officials of a Government Department shall be protected from Parliamentary criticism. So far as the rest of the right hon. Gentleman's speech is concerned, there is little or nothing that I want to say. The right hon. Gentleman has repeated a speech that he made on Christmas Eve, and, if hon. Members opposite are anxious to see my reply, I recommend them to read the reply I made on that occasion, and they will find a complete answer to, and a complete refutation of, every statement the right hon. Gentleman has repeated this afternoon.
In the few minutes which remain to me I want to bring back the Committee to the relevance of this Debate. It has at times wandered far beyond the subject matter of the Financial Resolution. We have had many speeches which have discoursed at length upon the fundamental causes of unemployment. This Motion asked simply for an increase in the borrowing powers for unemployment insurance. My right hon. Friend the Minister of Labour, when moving the Motion, said that there were four possible courses open to the Government for dealing with the present financial position of the Fund. We might reduce benefits. I ask hon. Members opposite whether that is a proposal that they could recommend to the House? I gather from their silence that that is ruled out. The second one is that we might increase the contributions of the employers and the workmen. Would they support that? I take it that that, too, is ruled out. The third course the Minister of Labour mentioned was to increase the Exchequer contributions. I gather from the opposition that manifested itself from the opposite side of the House when the last Bill was under consideration that that was not a course to which they would agree.
There remains, then, only the fourth, and that is an increase in the borrowing powers, and I gather that that has the enthusiastic support of the right hon. Gentleman who has just sat down. Indeed, he would go very much farther than this Money Resolution proposes. He is in favour of increasing the borrowing
powers to the extent of the annual income of the Fund. The annual income of the Fund is now £58,000,000, and so by asking for something which is £8,000,000 less than the limit to which the right hon. Gentleman opposite would go, at any rate we are illustrating the modesty of our present demands.
The hon. Member who spoke first in the Debate from the opposite side of the House, whom I do not see in his place, but who, I believe, represents one of the Divisions of Gloucestershire, and whose accent betrayed the fact that he is one of a numerous population which has migrated from the north of Great Britain, evidently attracted by the greater opportunities which exist here for satisfying political ambition—the hon. Member was very severe in his criticism of what he described as my falling from grace in regard to this matter of borrowing for the Unemployment Insurance Fund. The hon. Member said that a few months ago I poured scorn upon the idea. of borrowing, but the hon. Member before he made that charge, should at least have done me the justice of reading what I said on that occasion, and I gather that the right hon. Gentleman opposite, by the severity of his criticisms, has evidently not paid me that compliment. When I spoke on the occasion referred to, I confined my remarks on the matter of borrowing to 20 words, and I did not say one word either upon the merits or the demerits of borrowing for unemployment insurance. I will read to the House what I did say. After having pointed out that we had rejected every other possible source, I said:
I rejected borrowing for the reason that the Floating Debt, thanks to the financial policy of the. late Government, has been immensely inflated. My great object is to reduce it and not to increase it."—[OFFICIAL REPORT, 16th December, 1929; cols. 1092–93, Vol. 233.]
That is the only reference I made to the question of borrowing, and the reason I gave for it was the enormous amount of the Floating Debt, and I expressed my intention of making an attack upon that. That was on the 16th December last. I have pursued since then a well-considered and well-directed policy of reducing the Floating Debt. When I spoke on the occasion referred to the Floating Debt stood at £839,000,000, and it stands now at £647,000,000. That is a reduction,
of £190,000,000. Therefore, I maintain that there is no occasion for me to-day to stand in a white sheet in supporting the Resolution which is now before the Committee. I gave then, as I have said, as the only reason why I did not adopt the policy of borrowing; the condition of the Floating Debt. That condition has been removed; circumstances have entirely changed; and, therefore, what I said three months ago is the justification for the proposal that we are making this afternoon.
I reject, as I did then, any increase of the employers' contributions to the Fund. I rejected that three months ago, for reasons which I gave. I think that the burden of unemployment insurance is a very heavy burden on our industry. I was the only man, in the Parliament when the first Unemployment Insurance Bill was before the House, who opposed the employer's contribution, and I have never had any occasion to change my views on that matter. The incidence is very heavy, and it comes very unfairly. It is equally a charge on the employer whether he is making a profit or whether he is making a loss. However, that is by the way. The only thing that we have to ratify this afternoon is this proposal for an increase of borrowing powers, and I gather, not only from the speech of the right hon. Gentleman who has just sat down, but from all the speeches on the other side of the House, that there is no objection to this proposal, and, therefore, it needs no appeal from me to recommend this Resolution to the Committee.
The hon. Member to whom I have just referred advocated borrowing as being preferable to taxation, and he, like the right hon. Gentleman who has just sat down, charged me with taking a special delight in imposing taxation. If taxa-
tion is necessary in order to make up the deficits which the right hon. Gentleman left, I shall not, upon the occasion which formed the subject of the right hon. Gentleman's very eloquent peroration, hesitate to do so, but 1 shall endeavour to impose the taxation in a way different from the heavy taxation which the right hon. Gentleman imposed during his term of office. I can assure him of this—and this, perhaps, may be something of an anticipation of the Budget—that, whatever increase of taxation it may be necessary to make, I shall not follow his example and put the heaviest burden upon the weakest backs.
It is no pleasure to the Government to come down here this afternoon and ask for these powers. It is, as my right hon. Friend says, a regrettable necessity, but we believe that this is the least objectionable of all the courses that could be taken. I expressed the hope upon the occasion to which reference has been made, that things might improve in regard to employment. I regret that they have not improved, but hope springs eternal in the human breast, and I hope that it will not be necessary for us to come again to the House of Commons and carry out the desire of the right hon. Gentleman by appealing for further borrowing powers.
Question put, and agreed to.
Resolution to be reported upon Monday next.

The remaining Orders were read, and postponed.

Whereupon Mr. SPEAKER adjourned the House, without Question put, pursuant to Standing Order No. 3.

Adjourned at Two minutes after Four o'Clock until Monday next, 31st March.